• ELD Updates: From Exemptions to Enforcement

    03/12/2018 — Jen Deming

    ELD Updates:From Exemptions to enforcementAs we enter mid-March, we approach the three-month mark since the Electronic Logging Device (ELD) mandate deadline passed in December 2017. While the mandate has been "softly enforced" since the deadline, full enforcement will kick in beginning April 1. A stricter enforcement will include steeper fines, CSA points and subsequent out-of-service citations. That all adds up to tighter capacity and limited available truck drivers. So what does that mean for both carriers and shippers and what's been going on in the meantime?

    As a review, several industries and specific groups have extensions and exemptions that are currently in effect, or will be approaching an expiration date. Most carriers will be required to adhere to the mandate, unless qualified by a series of standards set by the Federal Motor Carrier Safety Administration (FMCSA). If you are not currently required to keep a record of duty status, you do not need to equip your vehicle engine with electronic logging technology. Additionally, if you keep RODS (Record of Duty Status) less than 8 days in a 30 day period, you are exempt as well. If you are a "driveaway/towaway" driver, or your vehicle's engine (not body, cab, or chassis) was made prior to 2000, the new ELD mandate does not apply to you. Rental truck drivers and those covered under the 90- day agricultural extension also are exempt for now. Agriculture and livestock haulers will have to file again, or install approved ELD devices by March 18. If they do not, fines and citations can be issued, but drivers will not be put out-of-service until April 1.

    Since the official implementation of the mandate in December, many additional groups have filed for further exemption requests. The Owner-Operator Independent Drivers Association (OOIDA) has been very transparent in its opposition of the mandate, and has asked for an oversight hearing in order to express its concerns over the mandate and it's implementation. The organization's main issue with the mandate concerns technical issues and malfunctioning, which is an ongoing concern with many of the approved devices. System failures and crashing, issues with GPS tracking and reporting, and mechanical difficulties linking to the truck engine are all cited challenges with the current ELD devices being used. On top of that, the current FMCSA list of approved ELD vendors includes many "self-certified" providers who are NOT actually compliant with requirements. It's a complicated vetting process that leaves many questions and lots of confusion for both truck drivers and law enforcement officials.

    Enforcement of the mandate up until this point has been spotty as well, due to the technical issues with the devices and insufficient training of both drivers and enforcement personnel. In fact, 17 states have decided not to enforce at all until April 1, with the remaining states leaving it up to the individual officer's discretion. The FMCSA has given direction to use a specific code, 39522A, in order to report violations in order to track ELD compliance, but to this time, the code has not been showing up in reports. Namely, this is due to the complicated nature of the devices and the wide range of types being used. Put simply, both drivers and enforcement officers are finding it difficult to recognize whether a carrier's chosen ELD is truly compliant. As a result, drivers are required to carry cards indicating proof they are compliant, as well as instructions on how to operate their software, report device errors, and alternative options to record their hours of service.

    With less than 3 weeks away to a more strict enforcement period, many carriers and truck drivers have yet to move ahead with becoming ELD compliant. Some are battling training issues or troubleshooting their current ELD technologies. Many small enterprises are simply waiting out the soft enforcement period and then find it easier to leave the industry entirely. Either way, it's safe to say that major changes will be occurring in the next few weeks and that the crunch in capacity will continue to affect shipping rates. PartnerShip can help make sure your shipments are covered at a competitive rate. Ship smarter with PartnerShip, get a quote today!

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  • High Freight Rates and Tight Capacity: What You Can Expect

    01/22/2018 — Leah Hyland

    High Freight Rates: What You Can Expect

    If you’ve been experiencing sticker shock from unpredictable freight rates lately, you’re not alone. Shippers are seeing a lot of volatility in the truckload and LTL market, with no end in sight.

    2017 ended with tightened capacity and record rates. By December, the average van rate was $2.11 per mile (DAT) – an all time high. The load-to-truck ratio was also breaking records at the end of the year, with 9 load postings for every truck posting in December.

    Coming off of a record high December, capacity continues to be tight in January – particularly with reefers since they’re needed to keep freight from freezing in the coldest parts of the country. DAT reported that the national load-to-truck ratio at the beginning of the year was the highest ever recorded at 25.2 reefer loads per truck. During which, the reefer rate was at a high $2.71/mile. Van rates have also been breaking records. According to DAT, they were at $2.30/mile on January 6.

    So what can shippers expect going forward? Let’s look at the trends. We saw a bit of a recession in 2015 and 2016 with rates and load-to-truck ratios declining, but that appears to be over. Rates climbed throughout 2017 and we can continue to expect increases in 2018.

    Overall, the U.S. economy is healthy right now and is growing, increasing freight demand. In contrast, the trucking industry is dealing with the aftermath of the ELD (electronic logging devices) mandate. Not only do they need more drivers and more equipment on the road to handle the same amount of freight, but they are also contending with a long running driver shortage. All of this equals tightened capacity, which is becoming the new normal in the industry.

    Recent weather events have been driving up rates as well. Areas of the U.S. that don’t typically experience extreme cold or snow have been hit by treacherous weather that has led to dangerous conditions including low visibility and icy roads. In a tight capacity market, these conditions drive up rates even more.

    In February we can expect to see capacity loosen some (barring any winter storms or other troublesome events), as this is typically the slowest time of year for freight. However, you’re likely to see higher rates than you have in years past, because of the long-term trends.

    In April, drivers not complying with the ELD mandate will be put out of service. Up until then, inspectors and roadside enforcement personnel are simply documenting and issuing citations if a truck isn’t equipped with the required device. As a result, we may see some ripple effects. There could be fleets that have held out or hoped to fly under the radar until April. There could also be another wave of trucking companies exiting the market, which will leave a void in the already tight market.

    Now it’s more important than ever to find ways to mitigate the impact of this tightened capacity. Plan ahead so you can be flexible. Providing more lead time and giving your carrier a longer pickup window rather than a specific time can lessen the strain on its network. Planning ahead can also help you shift to more committed freight and away from the spot market. The spot market is more sensitive to disruptions and subject to reactionary pricing spikes.

    Luckily you don’t have to navigate the freight market alone. When you work with PartnerShip, you benefit from our large network of carrier partners and our shipping expertise. We help you ship smarter with competitive rates and reliable service. Get a quote today!

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  • 2018: The Year of the Truck Driver

    12/06/2017 — Jen Deming

    Truck Driver

    Ringing in the New Year means starting fresh and anticipating big changes for future, and truck drivers may be looking forward to 2018 more than anyone. The ELD mandate, driver shortages, fuel costs, and e-commerce boom are all components that leverage trucking companies' ability to determine cost and coverage.

    As we covered in our previous blog post, truckload rates are going up due to a number of different factors. That means that drivers and trucking companies are going to be behind the wheel when it comes to determining how much shipping lanes will be going for. Having this leverage pushes the shipper to the passenger seat, with the potential for less bargaining power and high shipping costs heading into the new year.

    A significant factor contributing to the higher truckload rates is due to an overall shortage of willing and capable truck drivers. Trucking analyst John Larkin suggests that the slow but steady economic increase will result in stronger demand with tighter supply. "The primary driver of the supply/demand tightness is the economy-wide shortage of skilled, blue collar labor," he says. "While driver pay scales began to rise in the 2nd half of 2017, the starting point for wages was so low, that it may take multiple wage hikes before we see any alleviation of this chronic challenge." The ELD mandate, which will be fully implemented on Dec 18, 2017, may add increased tension to an already volatile scenario. Many drivers view the mandate as an invasion of privacy, and may push an already limited number of qualified and experienced drivers from the pool of available carriers.

    The amount of freight being hauled by trucks is expected to increase more than 3% annually over the next five years, as reported by the American Trucking Association. The industry has already seen a 2.8% increase over the past year, and the ATA estimates it could accelerate as much as 3.4% before slowing down again slightly. A notable increase in shipping economy means that though the available trucker pool has dwindled, those who are qualified are more in demand than ever. In addition, because those drivers may have to travel outside their normal area of operations, they can charge a premium. The ATA also reports that trucking will continue to be the dominant freight mode, and in 2017 "approximately 15.18 billion tons of freight will be moved by all transportation modes." The growing economy will further push demand and stretch the pool of available carriers. The ATA estimates that the current 50,000 driver-deficit could expand to 174,000 by 2026.

    With that economic push, and labor shortage, truck drivers will demand higher wages and shippers will have to pay. The third-quarter hurricanes are also said to have played a factor, with drivers understandably asking more for lanes they had run at lower rates previously. Additionally, Florida and Texas, the two states hit the hardest by the storms, are typically some of the most reliable recruiting markets for new drivers. Until the economy recovers in these states, the pool of new drivers will be limited, with many potential recruits choosing the recent wave of construction positions over trucking. A jump in driver pay may keep them interested. According to Bob Costello, the American Trucking Association's economist, observes, "We've already seen fleets raising pay and offering other incentives to attract drivers." The driver pay structure is also evolving. Where once most carriers were being paid by load, many are now moving to an hourly pay model, specifically as the ELD mandate takes effect. Either way, with the anticipated changes for the new year, it's safe to say truck drivers and carriers are going to have a huge influence on shipping rates for the near future.

    So, now that truck drivers have extra leverage, what can shippers do to help keep down their shipping costs in 2018? Working with a freight broker like PartnerShip can help add value and flexibility to your current shipping options. We shop rates and put in the legwork for you, negotiating on your behalf with carriers for both your LTL and your Truckload moves. If you have questions on how PartnerShip can help manage your shipping costs, call us at 800-599-2902 or get a free quote today!

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  • Truckload Rates Are Going Way Up. Are You Ready?

    10/31/2017 — Jerry Spelic

    Truckload shipping costs have been steadily climbing and are poised to go even higher because a perfect storm of events is pushing truckload rates to record highs: the looming Electronic Logging Device (ELD) mandate; the cleanup and aftermath of Hurricanes Harvey, Irma and Maria; and an already significant driver shortage that has stressed truckload capacity.