A bump in the road

A bump in the road

Features - Management

What you need to know about the ELD mandate and how it impacts the trucking industry, plant deliveries and your bottom line.

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May 15, 2018
Conner Howard
The ELD mandate is meant to keep roads safe by tracking commercial driver activity and imposing stiff penalties on those who exceed drive-time limits, but some see flaws in the regulations.
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Whether you receive regular shipments of hard goods or you have plant material shipped in from wholesale growers, chances are your garden center, like much of United States commerce, relies on ground transportation to make it all happen.

Managing deliveries and budgeting for shipping costs are already pressing concerns for independent retailers, but recent regulatory changes in the commercial freight industry may complicate matters even further.

In the past, commercial truck drivers were expected to keep track of the hours they spent on the road, being careful not to exceed their “on duty” limits and taking rest breaks when needed. This was often done manually in paper log books. However, regulatory agencies have been working for the past several years to take the guesswork out of the system with engine-tracking technology.

Enter the ELD, or electronic logging device. These web-enabled modules are installed on the engines of semi trucks and other commercial vehicles, where they track mechanical activity to keep an exact record of miles driven. The overall goal is to ensure fatigued drivers are not creating safety hazards on the road, but many commerce industry advocates are concerned that the regulations have overcorrected the issue of driver safety, with flexibility suffering as a result.

Legislation mandating the use of ELDs was debated in 2012 and had been proposed previously, but it wasn’t until 2014 when the regulations were made official. A years-long period of education and “soft enforcement” followed, in which transportation companies and independent drivers had time to familiarize themselves with the new laws and become compliant. As of April 1, 2018, full enforcement is in effect, with some groups seeking more time or direct reform of the rules.

Under current regulations, commercial drivers are permitted to be “on duty” for no more than 14 hours per day, with 11 of those hours allotted for driving time spent on the road. Other on-duty activities include pre-drive and post-drive checklists, loading and unloading cargo, work-related phone calls and more. Drivers who exceed these limits are subject to fines and penalties — and with the ELD mandate in place, there’s very little room for error.

Talmadge Coley, director of government affairs with AmericanHort, hopes that government officials will revisit the rules to allow more flexibility for drivers. Before the ELD mandate, if drivers encountered delays in their routes, they could log the delays and work them into their schedules. Now, delayed or not, every hour spent on the road counts toward a truck driver’s 11 hours of permitted drive time.

“That’s why we’re looking for just a little bit of flexibility for these guys, because you just never know what you’re going to hit when you get out there,” Coley says. “You can annotate and everything, but you might come into four or five situations during that drive that are out of the ordinary and you have to adjust accordingly. It’s a tough call.”

The ELD Mandate makes existing hours of duty limits more rigid — some groups fear that this could delay and complicate shipments.
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Balancing safety and efficiency

The issue of commercial driver safety has a long history of back-and-forth debate, and as with many aspects of public policy, it took a high-profile case to prompt official action. Andy Bruney, Vice President of T. Load Specialties, Inc. in Columbus, Ohio, says the ELD debate had been ongoing since 2012, but didn’t gain momentum as a government policy until 2014, when actor and comedian Tracy Morgan was struck by a commercial driver employed by Walmart.

“In 2012, the government had an idea to regulate this and keep [fatigued] drivers off the road, but it was flawed so it kept being tabled,” Bruney says. “[In 2014], they found [the driver] was [awake] for about 30 hours and crashed into Tracy Morgan’s limo on the New Jersey Turnpike. Unfortunately, things like that had been happening before, but because of social media and because Tracy Morgan was a high-profile person, it kind of brought this conversation to the forefront. So then, in 2015, the government basically said, ‘We’re going to go through with this.’”

As the ELD mandate progressed through the legal system and soft enforcement began, a line was drawn and several different groups either opposed or supported the new regulations for various reasons. Coley says some trucking associations are in favor of ensuring road safety at any cost, while others, such as the Owner Operator Independent Drivers Association, bemoan the bureaucratic burden.

“I think probably the loudest group on this is the independent truckers [the OOIDA]. They’ve made a lot of noise,” Coley says. “They see it as [the government] trying to force the smaller guys [out of business] because they don’t have enough people to drive. There’s a lot of politics at play with this, like with any large regulation. Some people see it as an attack, some people see it as necessary in the industry. The guys who are pushing for this, groups like the American Trucking Association, see it as a safety concern. It’s all brought back to the safety aspect.”

By enacting the ELD mandate, lawmakers hope to ratify existing hours of service limits into concrete requirements that are tracked and monitored. This way, drivers who exceed their allowed daily drive time can be accurately held accountable. However, Bruney suggests that the law is overcorrecting the driver safety issue, causing stricter schedules.

“My opinion is that [the law] is still somewhat flawed,” he says. “I think it’s so rigid, and it’s a race against the clock, and these trucks just really don’t have enough time to execute their assignments.”

Coley says there is a widespread concern that these more strict schedules can lead to commercial drivers taking more risks on the road in order to meet their deadlines without going beyond their ELD-enforced drive time limits.

“[The mandate could] create negative incentives with these limitations, where [a driver says] ‘I only have 30 minutes left, I’ve got to get there, I have to go 90 miles an hour to get there.’ So, do guys speed to overcompensate? On the Twitter feeds, a lot of the truckers are saying ‘now people are rushing around and driving like maniacs,’” Coley says.

At the same time, there is also the issue of price inflation. Bruney points out that when drivers are already stretched thin and are given even tighter deadlines to deliver on, costs of shipping tend to increase.

When transportation professionals have less time to make deliveries, shipping costs tend to increase as a result.
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“A couple years ago, you had a driver who could, let’s say, go back and forth from home to a source and back, and he could do that three times no problem,” Bruney says. “Now, he’s struggling to do it twice, and who knows where he’s going to end up. There could be more costs associated because he’s got to go to a hotel or something like that.”

Inflation in shipping costs could be even more severe, specifically for horticultural businesses like garden centers, that are dealing with perishable plants and sensitive timetables.

“As far as concerns for the industry, I think first and foremost is the price increases for freight in general,” Coley says. “We’re not the only ones that are getting these price increases — I think the produce industry first started putting it up in January and February that there were significant increases. We started getting emails from our state associations, and our members as well, saying, ‘Hey, my freight costs just went up like 50 percent, some as much as 80 percent in states like Oregon, what’s going on here, is there any relief in sight?’”

At The Garden Factory in Rochester, N.Y., which placed #27 on Garden Center’s 2017 Top 100 IGCs List, the ELD regulations have introduced complications to the retailer’s regular delivery schedule. Store Manager Robert James says his shipping partners based in Florida must now give themselves more time to complete their route, making drop-offs less reliable and reducing lead time.

“The only thing we’re having any issue with is when we order our tropicals from Florida,” James says. “Where we used to be able to place an order all the way up to Wednesday a week before we’d get a delivery, now we have to have it done by the Sunday prior. They’ve always been great with us, and they’re still doing as well as they can, but those regulations have made them have to slow the process down, so we’re always wondering ‘are we getting the delivery on Friday, are we getting it on Saturday?’ It’s more guesswork now.”

The recent regulations do allow for some deviation in the schedule when needed: drivers can report occasional delays in their ELD logs, and if they get pulled over, their logs will show law enforcement officers that extenuating circumstances complicated the driver’s schedule. Drivers can also claim the “safe haven option,” which allows them to slightly exceed their 11-hour drive times in order to find a safe place to stop and rest. However, concerns over the rigidity of the laws and potential price inflation persist, and AmericanHort and other industry groups continue to lobby for a reevaluation.

Effective communication between IGCs, their suppliers and their shipping partners is key to keeping costs down, especially under the ELD mandate.
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Shifting gears, finding solutions

Most parties involved in the ELD debate understand that the technology isn’t likely to go anywhere. Though the rule requiring their use recently went into effect, the devices themselves have been in use and development for several years.

“We, as an organization, realize that the ELD is here to stay,” Coley says. “There are a lot of groups out there that are saying ‘get rid of the ELDs’ and stuff like that. I think the time to ask for that has come and passed, because what you have is a whole cottage industry of ELD makers that are out there and have been waiting for this day to come.”

Understanding that, AmericanHort is maintaining a dialogue with the Federal Motor Carrier Safety Administration and is focusing its lobbying efforts on clarifying exemptions and possibly relaxing some of the regulatory strain on horticultural businesses and the freight they rely on.

“One of the things we’re focused on is the agricultural exemption that is associated with this new mandate,” Coley says. “They haven’t put out good guidance on who is included in the exemption and who is not. From the federal side, it’s very opaque. As of now, the horticulture industry isn’t specifically included, but it’s not really specifically excluded either.”

There are also rumblings and rumors of other factions attempting to de-fund or otherwise defeat the ELD mandate legally. Coley says that despite the contention the regulations have caused, they have a constitutional basis and are not likely to be easily overturned.

“The most rancor out there is from the groups that say it’s big government overreach, but from what I’ve read, [the law has] been taken to court and it’s held up,” he says. “I don’t see anybody taking it to court anymore and looking to strike it down. There’s a lot of angst with this issue. I think there are five or six states that have actually put bills out there to de-fund enforcement of the actual mandate itself, because people are so upset about it.”

As the legal and regulatory debate continues, trucking professionals, growers and retailers alike must adapt to the regulations as best they can. The ELD mandate will likely bring about a time crunch for plant deliveries, especially when a driver is making deliveries to multiple businesses on a single route, Bruney says. He suggests that garden center retailers in close proximity to one another may be able to work out a joint delivery destination so everyone saves on shipping costs. The fewer deliveries a driver has to make, the better.

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“One of my suggestions was, for instance, if we’re going to the quad cities [in Northwest Illinois and Southeastern Iowa], where you’ve got Davenport, Molina and Port Byron — all these little towns are within eight miles of each other. If there’s any way we could make a two pick-up, five drop-off load into a two pick-up, two drop-off load, we could cut down on extra deliveries,” Bruney says. “I understand that some garden centers are competitors with one another, but if one main nursery could accept a delivery and tell the others [in the area] to come pick up their product, that would really help.”

If consolidating deliveries isn’t feasible, Bruney says using pallets as often as possible can keep shipping costs down as well. When a driver is moving plant products on pallets, unloading is easier as a result, driver assistance isn’t needed as often and deadlines are easier to maintain.

When all else fails, effective and regular communication between retailers, suppliers and transportation services is always helpful. Too often, Bruney says, drivers are making deliveries when garden centers aren’t expecting them, which exacerbates deadline stress and negatively impacts shipping costs.

“Communication is key,” Bruney says. “Sometimes, these nurseries will have a load and they’ll say, ‘Hey, someone ordered this in Iowa,’ so they load it up in Ohio, send it to Iowa and the truck gets there and the people there [say], ‘I had no idea it was coming.’ So, I’m going to make that call and let them know, because I’m not going to string my driver out. I’m going to let [retailers] know that [product is] coming and they need to be prepared for it.”

No matter how garden centers and their shipping providers adapt to the ELD mandate, the situation is bound to evolve over time as lobbying groups and invested factions continue to make their cases to lawmakers.

“We do have unique needs [in the horticulture industry],” Coley says. “It’s very time-consuming to load plants into a truck. We’re trying to do everything we can for our folks to keep them educated and hopefully get to a better place than we are right now, because it’s a tough situation. And it’s not just our industry, it’s many industries. It’s a collective effort.”