The Canadian ELD Mandate – Why There’s No Need to Panic

The Canadian ELD mandate may come into effect in late 2019, but the Canadian Council of Motor Transport Administrators (CCMTA) has not yet finalized an ELD rule. While there may be some minor disruption, the experience of introducing a very similar mandate in the US last year indicates there’s not much to worry about.

Arguably, ELDs are a good thing. In the US, the mandatory use of in-cab devices to record hours of service for truck drivers has presented a significant opportunity to harness the data gathered for other, broader, fleet management and business management purposes – not least truck route optimization.

So what’s new and why do you not need to worry?

Most seem to feel Canada’s ELD mandate will bring little new. We can expect the rules of the Canadian ELD mandate to be similar to the US legislation. As the CCMTA says “the vast majority of ELD features and functionality will be driven by the U.S. ELD market.”

According to Freightwaves.com, the few anticipated differences include:

• Less rigorous reporting requirements (every 14 days via .pdf instead of continuous electronic transfer)
• HoS restrictions will require drivers to select one of two cycles:
  • Cycle 1 — no driving after 70 on-duty hours in 7 days
  • Cycle 2 — no driving after 120 on-duty hours in 14 days, and driver must take at least 24 consecutive hours off duty prior to accumulating any period of 70 hours on duty
• There will be different HoS restrictions for activity above or below the geographical boundary known as the 60^th parallel.
• Tighter restrictions on “personal conveyance” — the distance a driver can drive a commercial motor vehicle for personal use while off-duty.

Concerns about the potential impact on Canadian trucking were reported in The Journal of Commerce (JoC), in December 2018. The article speculates that the legislative change will further tighten Canadian trucking capacity. The JoC says capacity has already been hit by an aging workforce and spillover from the US ELD mandate. One particular point of interest is the Montreal-Toronto round-trip run, which pushes at the 12-hour limit when delivery time is included, and raises the risk that a truck driver may not be able to make it home before taking a mandated break. Shippers will therefore have to load transfer cargo to mitigate rising delivery costs on that route and other legs.

In the US, ELDs are credited with causing a spike in demand for intermodal and rail transport of more than 7 percent. Rail adds time to deliveries, but if you’re waiting to find a driver, it can even out. It’s possible Canadian trucking will lose out to intermodal at the same rate.

An easy transition

But there are significant reasons why the introduction of ELDs in Canada will likely be an industry non-event.

Firstly, Canada’s truck driver turnover rate is nowhere near the problem it is in the US — around 10 percent, according to analyst firm TFI International, compared to 94 percent south of the border, according to ATA’s Trucking Activity Report. The pressure to attract and retain drivers is simply less intense, meaning clamping down on HoS is less likely to make drivers quit.

Another important point is that many truck operators in Canada already use electronic on-board recorders, partly because Canadian trucks often cross into the US where ELD requirements are already in place.

The impact on the trucking industry in the US, also, has been a great deal less than feared – many describe it as a storm in a teacup. As it turns out, the majority of businesses were running legally anyway, and the mandate hasn’t flushed out a bunch of them breaking the law. There have been very few stories about companies getting caught out.

Instead of fretting about the Canadian ELD mandate, it might be a good time to reflect on the opportunities presented by feeding real-time data on driver activity into route optimization software in order to drive more accurate, efficient vehicle route plans.

How route optimization software can harvest benefits from ELDs

Overall, route optimization software counteracts the effects of the capacity crunch. Quite simply, more efficient routes means fewer drivers needed. It also counters rising costs. More efficient routes save 10-30 percent of fleet operating costs.

There are also specific ways route optimization software reaps ELD-related benefits:

• Improved compliance. You get accurate measurement of hours driven by individual drivers and more realistic estimates of how long any given route will actually take, so there’s less chance of blowing HoS limits. Fewer fines for you and driver.
• Continuously improved routing. Gathering information about the real hours needed to make a delivery means you can make more accurate plans in future.
• Maximize driver earnings and profits within HoS. Drivers and planners can be tempted into allowing too much contingency and as a consequence making trips shorter than they need to be, for fear of blowing HoS limits. This reduces driver earnings and profits. The software can be used to maximize the number of hours driven within the HoS limits, making sure drivers earn as much as possible.
• Improved management visibility of distribution performance. ELDs or more advanced telematics systems give you a ton of data that, when combined with data from route planning software gives the management team insights into fleet performance, including trends in cost and service KPIs.

The Canadian ELD mandate and the data it will make available can also make it easier to develop ever-better plans going forward. Whether you have a simple ELD solution, or have invested in a wider telematics solution that gathers more detailed information, the data you are gathering can empower you to continuously improve your distribution operations.

Since every fleet operator must now invest in an ELD system, now is the time to consider how you can use route optimization software to help harness that data and reap the rewards in terms of better visibility and control of your truck operations.