With a final rule and compliance coming very shortly concerning electronic logging devices (ELDs) for commercial vehicles, fleets that are still on the fence about moving to ELDs will have to take the plunge, at least on the basic requirements. But they might want to consider a deeper dive.
Two fleets run by family-owned companies with different business models say going farther with ELDs saved money, cut out various kinds of waste and inefficiency and created other, less tangible benefits that are difficult to measure but can have a significant impact on operations and bottom line. The discussion took place via a Fleet Owner webinar Oct. 1 sponsored by fleet management and telematics technology provider Omnitracs.
Watch the free archived version of the Oct. 1 webinar
"I don't see a downside risk for going with ELDs, but I do see a risk for not doing it," said Todd Davis, president of Davis Transfer Company Inc., a regional truckload carrier with terminals in Carnesville and Valdosta, GA, and Lakeland, FL. Davis explained that the company has some 800 trailers and 250 tractors driven mainly by employee drivers and a few contracted owner-operators, with an average of 250-300-mi. hauls.
"The benefits in revenues, even, outweigh the costs," Davis contended, speaking about ELD systems with a range of additional functionality. "If you're not already on ELDs," he added, "you should be." Beyond basic regulatory compliance, Davis noted his belief that going forward, trucking companies that don't take advantage of some key ELD-linked capabilities could be driven out of the market because the odds will be stacked against them on risk management and accident liability.
Luke Olin, director of transportation at Minnesota-based Upper Lakes Foods Inc., said his company is the largest independent food and related supplies distributor in the state, with two distribution facilities and annual sales exceeding $170 million. The company has 48 trucks and 56 trailers of different sizes, he noted, and its drivers — who spend varying proportions of their days unloading and delivering product — typically run less than 450 miles and return to the yard each day.
"So the nature of our driver is a little bit different. It's a lot of delivery and it's a physical job," Olin said, adding, "we kind of tailor each route to our customers." He pointed out that the company's drivers "will take some of our 28-foot trailers into wooded paths you didn't think you could take a Suburban down — school camps and things of that nature."
Both companies have tapped additional ELD functionality beyond the basic requirements for charting drivers' record of duty status. Upper Lakes Foods adopted GPS routing and has been using ELDs since 2003, Olin said, and also uses in-cab cameras and video recording technology. The company's drivers now use tablet computers, smart phones or other consumer devices that relay information to trucks' ELD systems.
For its part, Davis Transfer has used electronic driver communication devices "since the mid-1990s" and became a test partner with Omnitracs in 2008-09, at that time installing 100 of the technology provider's MCP100 fleet management products, which include an hours of service (HOS) application. The company experienced several accidents around that time, he noted, and did some self-auditing of driver logs.
"We looked at our logbooks and everything looked great, but the disconnect came when we started comparing our logbooks with our feeds from our GPS units from the trucks," Davis told listeners. "There, we found gaps. We knew if we didn't find a way to map where the truck was with what the driver was putting in the logbook, then we had problems."
"That was the main driver to go to an ELD-type product," Davis said.
Both Olin and Davis described some growing pains at first when their companies went to ELD systems.
"We got a lot of push-back from drivers, as you might imagine," Davis said. "We asked the drivers to trust what we were doing and give us some time." Likewise, Olin noted that some drivers and other staff weren't thrilled at first by the transition.
"I think any change like that for office staff and the driving community can be a challenge; adapting to a change can be difficult for all of us," Olin contended. "Any change or transition is going to take some time to adapt, whether that's on the driver's side, on the office staff or in the warehouse."
However, also in both companies' cases, Davis and Olin said it didn't take long for drivers and back office staff to adapt to ELDs and accompanying systems — and once they did, no one wanted then or would want now to go back to paper logs and "nuisance" communication techniques like "driver check calls" to see where drivers are at with HOS and deliveries.
ELDs streamlined and simplified complex HOS compliance, eliminating the potential to falsify driver logbooks, and also brought dispatching and routing to a higher level thanks to added routing systems and software.
"There's a reduction in paperwork [for drivers], obviously. There's a reduction of workload for dispatch and safety" personnel, Davis pointed out. "It gives us the information right on our desktop as far as which load will work for a driver and which load will not work for a driver. It also helps with our on-time service with our customers. It forces dispatch efficiency and accountability."
According to Davis, the question at his company was, "How do we keep the wheels running on the trucks to make the payments and cover the overhead when we're locked into specific hours being logged to the minute?" So Davis Transfer had to tighten up planning and routing, and drivers needed to be sure they were using their time efficiently.
Those things were true for both companies, and they added up to less time — and fuel — wasted, as well as optimized trip planning and fewer out-of-route miles. At Upper Lakes Foods, Olin noted that the ELD's routing system improved the fleet's agility and responsiveness: "If we add a customer on a specific route, what's that going to do to the driver's service time? Are we going to be able to make that happen? Our routes are constantly changing."
In its case, Davis Transfer "went from about a 62% efficiency of using that full 11 hours of driving time [for drivers] to mid- to high-70s, which is currently what we operate at," the company's president explained.
Olin noted that coupled with GPS routing and tracking, Upper Lakes Foods' ELD system allows the company to watch for and correct potential discrepancies. "If there are complications with our logging software, we've got the ability to see if there's unidentified activity out there — we can locate where the truck ran on any specific day, narrow it down and assign that activity back to a driver to make sure we're staying in compliance," he said.
With the ELD, Olin added, "should there be any discrepancies or unassigned activity in there, we can manage that and edit logs if for any reason there's inaccurate information. Maybe a device locks up on a driver when they return, and they're stuck in 'on duty.' We can easily edit that an update the information."
Drivers more rested, focused, safer
Olin noted that his company, like others across the industry, has had to work hard to recruit and retain drivers, and said ELDs and related technology have helped by improving driver communication and day-to-day planning.
"Our drivers might deliver 70% and only drive 30% of the day. Some days it might be 50-50," he explained. "But the routing software really gives not only the staff in the logistics office the chance to see what the routes are looking like, it gives the drivers a good idea as to what they can expect for their day as well."
ELDs and related systems have "certainly enhanced our communication with drivers. We don't have to rely on a phone call," Olin said, and dispatch/office staff can instead send electronic messages to drivers that the system can read aloud to help drivers stay focused on the road.
"That's why we take steps to go beyond [ELD] compliance points," Olin added. "We see it on the driver side where we're able to get more cases out of the truck during the day; drivers aren't out there trying to manipulate logs or having to record paper logs." The company does keep paper logbooks in trucks, he noted, in case they're ever needed as a backup.
Davis said that once ELDs were in place, his company's drivers quickly showed signs of less fatigue. "I noticed an immediate difference in my communication with drivers with how rested they were when they came in or I talked to them on the phone," he recalled. "Our dispatchers and driver managers noticed a definitive difference in drivers as well. Ensuring drivers were getting that 10-hour break was very telling."
With safety a big priority for Davis Transfer, better-rested drivers are an important part of ELD benefits, Davis noted. "Driver fatigue is the biggest factor in large vehicle accidents. I truly believe that the 10-hour break is very important for a driver and ought to be a sacred 10 hours; I think the ELD helps keep us accountable for that time."
And prospective drivers have been noticing, Davis added. "When a driver comes into your company or my company and wants to go to work, safety is important to those drivers. There's not only protections for the company [in using ELDs], there's protection for them as well."
With routing efficiency and a streamlined driver logbook process also comes better customer service, Davis and Olin said. Davis Transfer, for example, "increased on-time service — that's been a big one with our customers."
Olin agreed, pointing to better customer service as a centrally important outcome. "I think that really, aside from compliance, the enhanced customer service that we see is the other root cause that we see for going beyond" the basics required with ELDs, he said. "Once our customers have got that, they don't want to go back to a manual process."
ELDs and tracking systems helped Upper Lake Foods achieve better fleet visibility — and since the system feeds data to and from a web-based fleet management system, that's anywhere, anytime visibility for office staff wherever there's an Internet connection.
"Our sales staff uses that information as well to let a customer know when they might expect their deliveries," Olin said. Upper Lakes Foods can provide estimated times of arrival to customers within an hour or less, "and some customers would like to know down to the minute," he contended, a feature his company would like to have in the future.
"We really pride ourselves on customer service, and that's what helps us differentiate ourselves from nationwide companies that we compete against," Olin told listeners.
Upper Lakes Foods' system can also help in situations when the customer, contrary to the old adage, is not always right. "We'll have customers come to us and say, 'Boy, it really feels like the last few weeks, your truck has been showing up later and later,'" Olin said, "and we can run the reports to show right down to the minute when the truck was there. It gives us some ammo in our pockets there for going back to our customers."
Beyond driver and operations efficiency and accountability, Davis explained that his company's ELD product and system improved customer accountability, too.
"Another very exciting thing we saw was our ability to go and call a customer and say, 'Hey, you put us on a load that's impossible to make within legal hours of service, and I can show you what our drivers have done,'" he said. "Then it becomes, 'I'm going to put it on you (the customer). You know the data; you know what you're asking. You can go away from me as a customer, but I'm not going to run an illegal run. If you go to another carrier, just remember that you're asking someone to do something that's not legal.'"
As a result, customers have been more flexible with deliveries and attuned to safety, according to Davis. "Our ability to hold customers' feet to the fire on those things and maybe make them better and more respectful of what we're trying to do to be inside of the law was a very big deal . . . It was a huge turning point to have the data to back it up. It's hard to argue with hard facts."
It's even given Davis Transfer better leverage in negotiating rates. "Allowing customers to see our runs, efficiency and the cost of safety — that's one thing that more customers these days are recognizing," he said. While the market drives rates, he added, customers increasingly are looking at safety — and the resulting reduced liability exposure — as a benefit worth paying for.
"The last thing a company wants is to have their name thrown into some type of litigation," Davis maintained. "I think they're choosing to partner with the safest trucking companies they can; sometimes rates do come into that."
Better image, fewer field audits
Just like ELD and accompanying telematics systems can help boost a company's image with drivers and customers, apparently they can do the same with the authorities. Both Davis and Olin noted that their companies have experienced fewer field audits.
"We can print driver logs so copies of them are easily accessible, such as if a state trooper or someone at a weigh scale pulls our truck over," Olin said. "We have a very good safety record and virtually nonexistent [Compliance, Safety, Accountability, or CSA, program] scores, so we don't get a lot of the random inspections at the weigh scales in our region. A lot of times, we kind of get the 'wave through,'" he explained.
"The number of our drivers that were pulled in to scales to have an offsite audit fell dramatically," Davis said, also pointing to lower CSA scores for Davis Transfer. "I believe the guys that are working the scales and are out there doing field audits, they get to know the companies" that have HOS and other violations, he asserted.
Although it's not part of basic ELD requirements, the video technology Upper Lake Foods is using provides "a huge savings in liability," Olin said. "I can share videos and stories with you — this past winter, we had a driver who had to slam on the brakes," he recounted. It turned out to be because someone was wandering around in the middle of the highway under the influence of some substance, he contended, and this person was arrested by state police.
"But you can imagine, had we gotten in an accident then and our driver ran over someone on the highway, that's where a company like ours couldn't absorb a lawsuit of that size," Olin noted.
Even the more basic ELD technology and functions can help with accident liability, according to Davis, who explained that electronic logbooks have helped his company document driver safety better. "We all know that with trucks on the road, we're going to have accidents. We're doing everything we can to make sure our driver is legal, has had his rest period, and all that is documented and verified," he said.
"Going through an accident process is not the time to be wondering how we're going to prove to the authorities or opposing attorneys that we were doing what we were supposed to be doing," Davis added. "ELDs really give us that documented proof."
Insurance and maintenance savings
ELD and telematics systems can also automate things like the driver's vehicle inspection report before a trip, should fleets add that functionality — and the information can be shared with the fleet maintenance department. Since potentially adverse events like hard braking or cornering can be recorded and documented in near real time, Olin noted, that data can be used for driver coaching and rewards programs for improvement.
"Electronic logs and telematics capabilities have given us a lot of reporting functions," he said. "The biggest thing for us is the data is there now. I've got the ability to take different driver behaviors or customer information, and I can manipulate that data and use it however I want. That creates a very valuable tool for us."
"We really do see a difference in driver behavior," he added. "With the technology in the trucks, the cameras being one part of that, it's in the back of the driver's mind — they're thinking they'll approach a stop light a little slower, they'll corner a little easier instead of tipping over a pallet" back in the trailer.
Olin said he's also got custom alerts set up to be sent directly to him in various situations. "I've got HOS violation or sensor failure [notices], for instance, where I can get alerts sent to me. If our truck is in a collision, I may know about it before a phone call is even made to law enforcement," he noted. Olin explained that his company uses the system's data as a coaching tool, particularly for inexperienced drivers.
"We might show them what continued hard braking is doing to the equipment or damaging product. If a pallet of food tips over, it might incur a big cost to the company," he said. "So we coach drivers and we actually measure the effectiveness of that coaching."
Olin noted that the company's maintenance technicians have seen a difference in driver behaviors as well, and both he and Davis pointed out that ELDs — just as they can enhance driver scheduling and routing — can also help with scheduling maintenance.
"We use that [information] when we're scheduling and trying to be efficient with a driver's hours," Davis said. "We know when the best time to bring a driver in is based on where he's going to be in his day."
Ultimately, Olin pointed out, going beyond basic compliance with ELDs has also helped Upper Lakes Foods reduce insurance premiums. "We've had less accidents and drivers being more aware of their surroundings in the back of their mind," he said.
"The cost to put some of this stuff on our trucks is paid for on lower repair costs and insurance premiums," Olin added. "We see that right away."