Insider Blog

Why did trucking capacity shrink after the ELD mandate?

In 2015, the Federal Motor Carrier Safety Administration put forward a supply chain safety measure meant to regulate the amount of time a truck driver stays on the road. The FMCSA regulation, which was put into force two years later, forced truckload and LTL carriers through some growing pains, but these hiccups were temporary.

At the Jump Start 2019 supply chain conference, J.B. Hunt Transport’s Terry Matthews said the trucking industry saw about 5 percent of capacity leave the market during the run up to the ELD rule. The ELD-fueled capacity shortage lasted through about the middle of 2018, he told attendees.

“It made a great impact,” he said during the Jump Start 2019 supply chain conference. “There’s about a full year where it really tightened up.” He noted, though, that this capacity hit due to the mandate was a one-time thing; the impact, he said, was “similar to what we saw in the hours of service” regulation.

Jeff Heller, vice president of intermodal and automotive at Norfolk Southern Corp., echoed Matthews’ assessment of the post-ELD impact. Calling it “a unique event,” he said that many industry insiders were taken by surprise not because of the mandate itself but due to the fact that it occurred during a trying time for capacity.

Heller said carriers were implementing ELDs “during one of the biggest freight peaks that quite honestly we haven’t seen in some time. So you had the convergence of an increase in volume coupled with a lot of capacity coming out of the system because of the requirement for ELDs.”

While carriers may now be accustomed to ELDs, Heller said the rest of the supply chain is lagging behind in optimizing their business practices for an ELD world.

“If we’re going to make the best use of [capacity] as a country and as a supply chain,” he said, “it’s really important that the other segments of that supply chain adopt that same philosophy.”

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Categories: Logistics, Product