EOBR (electronic onboard recorder) suppliers are preparing for increased demand, increased competition and increased levels of uncertainty in the marketplace following the Notice of Proposed Rulemaking for EOBRs made public yesterday morning. They also believe that the new EOBR regulation, like CSA, will help to create safer highways over time, although probably at the expense of increased transportation costs.
“The short-term effect will be a lot of uncertainty,” noted Christian Schenk, vice president of product marketing for Xata. “Longer term, we expect to see increased rates to move freight, but the trade-off is safer roads.”
According to Schenk, the rulemaking will create change along the length of the supply chain, like a game of crack the whip. “The reality is that this will change transportation in a big way,” he said. “It will change how freight is moved and the costs associated with it.
“We have had calls from all of our major customers about this, but also from the financial and insurance communities,” Schenk explained. “The EOBR regulation will make a lot of changes in a lot of places. It is not just about Hours-of-Service (HOS) anymore. Carriers are held responsible for their employees and the data is public, so there will absolutely be a snowball effect with liability. Carriers and shippers both have a lot to lose, as do drivers. For the first time, we are anticipating having customers without trucks [but who want tools to help manage the risk associated with using trucks to move their freight.]”
“In the short term, we expect there will be a lot of feedback about the Notice of Proposed Rulemaking on EOBRs,” said Brian McLaughlin, COO of PeopleNet, “and probably a few lawsuits, as well. This is not the end of the rulemaking process on this issue. The final rule will be different. It could directly impact safety, though. There is a correlation now between safety and fleets that are using EOBRs.
“We do anticipate a fairly healthy uptick in demand for EOBRs,” McLaughlin added. “In fact, we are seeing that now. About 80 to 90% of our prospects want to try the EOBR module. There is so much momentum behind this issue already because of several factors—the earlier hints about a broader EOBR mandate, CSA, and the benefits fleets using EOBRs are seeing—[the market is changing ahead of the regulation.]”
“The regulation will probably also create some new competition in the EOBR market,” he noted. “We expect there will be some new low-cost, single-function systems. We introduced a just-EOBR bundle earlier ourselves. More competition drives down price and makes us all better.”
Both McLaughlin and Schenk feel like the three-year lead time is adequate for suppliers and carriers to prepare. “Three years to comply seems adequate,” McLaughlin said. “It allows suppliers to get up to speed on the latest technical requirements for EOBR systems and it allows the market time to ramp up supply to meet increasing demand. We should be able to make a timely and orderly transition. And when all is said and done, it could actually end up being more like four to four and a half years before the regulation is in full effect.”
The possibility DOT raised of phasing in the regulation over time is not a good idea, however, according to McLaughlin or to Schenk. “There is a problem with the larger fleets having to comply first,” said Schenk. “They are often segmented under various DOT numbers, for instance. Instead, DOT should focus on how the government is going to use the information EOBRs will provide and perhaps offer a ‘grace period’ during the start-up concerning what data they collect.”
“I do not think they should phase-in the regulation, either,” noted McLaughlin. “EOBRs are very scalable. Fleets can get small offerings or more full-functioning systems, depending on their needs. It also doesn’t make sense to exempt carriers with good HOS scores from the regulation. Most fleets with great Hours-of-Service records are already using EOBRs anyway. Paper logs are just an imperfect science.
“The goal should be to create a fair playing field,” he added. “We just have to do that. Then we can let the market drive the product offerings.”
Still, there is much to be done between now and the final rulemaking. Norm Ellis,vice president of sales, services and marketing for Qualcomm Enterprise Services, a unit of Qualcomm, Inc., offered a list of issues that need to be resolved before proceeding.
“For the proposed regulation to require electronic onboard recorders in vehicles to be effective, we believe there are a number of technical issues that must be addressed,” he noted. “Among the issues that need to be resolved are:
- Ensuring an effective interface between EOBRs and enforcement personnel
- Standardized certification of EOBR compliance
- Enhance requirements for HOS management systems
- Standardization of EOBR tamper detection/prevention and system-wide information security measures.
