ers, boosting LTL tonnage. That trend has
reversed itself this year; those heavier shipments are transitioning back to truckload
operators. At the same time, the explosion
of e-commerce-generated freight is changing
the profile of shipments—and tonnage handled—in LTL carrier networks. It’s driving
smaller, lighter, and more frequent shipments
to and from more distribution centers strategically located to enable next-day—and in
some cases, same-day—delivery of goods to
the end-user.
On balance, carrier executives are cautiously optimistic. For the most part, those
interviewed for this story expect capacity
to gradually tighten as the year progresses.
E-commerce remains a growth opportunity
and a challenge. Shippers still recognize they
have a role in effective capacity management
and carrier success, and can benefit from
collaborative relationships as a “shipper of
choice.” Yet the road ahead is not without
challenges. Several factors are at play, among them:
b The approaching December deadline for fleets to com-
ply with the federal government’s mandated adoption of
electronic logging devices (ELDs) and how it will affect
driver hours of service.
b New regulatory mandates on the horizon around alco-
hol and drug testing, entry-level driver-training program
qualifications and requirements, speed limits, tolls, taxes,
and environmental legislation.
b The impact of current and emerging technologies, their
potential for disruption, and the benefits for trucker oper-
ating efficiencies, productivity, customer service, and new
business opportunities.
b The constant increase in virtually every expense involved
in running a trucking business—from driver wages to
maintenance to health insurance and the cost of tires,
trucks, and trailers.
b And the ever-present and worsening driver shortage.
ELD DEADLINE LOOMING
December is the deadline the Federal Motor Carrier Safety
Administration has set for trucking operators to fully
implement upgraded electronic logging devices (ELDs) to
improve compliance with current driver hours-of-service
(HOS) regulations. For larger carriers, it’s a technology
mandate they are well on their way toward meeting. For
smaller carriers, issues with timing and selection of a tech-
nology provider as well as implementation may lead to
missed deadlines and end up affecting industry capacity at
year-end.
There are a considerable number of smaller carriers that
remain on the fence with ELD upgrade decisions, says
Bart De Muynck, research vice president, transportation
technology for research firm Gartner Inc. According to his
research, 92 percent of small carriers—those with 50 or
fewer trucks—are waiting until the fourth quarter to make
the switch. As those carriers rush against the deadline to
become compliant, “there will be delays, and in the winter-
time, that could lead to truck-capacity shortages,” he says.
On the positive side, carriers already using upgraded
ELDs have seen the number of truck-driver HOS viola-
tions cut in half. “[With] fewer hours-of-service violations,
you have fewer vehicles ordered out of service [and thus
unavailable to haul freight]. That opens up capacity you
might not otherwise have available,” says De Muynck.
Then there is the issue of the data and who owns it.
“Many of the ELD contracts state that the telematics vendor
owns the data, and they can sell it … to a third party. It’s
a very contentious point,” he says. “It’s the idea of ‘
info-nomics.’” He notes that third-party technology platforms
like FourKites are generating two revenue streams from
ELD data: one for visibility and another for capacity management. “Carriers understand their data is getting monetized,” De Muynck says. “At some point, they [carriers] are
going to say ‘Give me a cut of that revenue, or I won’t give
you my data anymore.’”
Old Dominion’s Freeman sees multiple benefits from
ELDs, which provide not just HOS-compliance information but also richer data on overall truck and driver performance. Old Dominion expects to complete its upgrade
to new ELD technology by October. It is integrating its
back-office and performance-management systems to utilize the new ELD-generated data for better fuel-mileage
tracking, measuring driver behavior in areas such as progressive shifting, and getting advance alerts from engine
fault codes to avoid breakdowns.
Darren Hawkins, chief executive of LTL carrier YRC
Worldwide, believes there is benefit from ELD-generated
data that goes beyond regulatory compliance. “The industry needs a trusted third-party clearinghouse to gather and
analyze ELD data [for] what it means related to traffic,
freight flows, time-of-day issues, detention, and much
more,” he says. Hawkins cites the American Transportation
Research Institute (ATRI) as the potential home for such a
clearinghouse that, as a neutral party, could aggregate, analyze, and share consolidated insights and intelligence with
