Building Your ELD Strategy
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This document provides an overview of electronic logging devices (ELDs) and the ELD mandate. It discusses recent court rulings upholding the mandate. It then covers what is required by the mandate, how ELDs impact insurance, expectations for ELD providers and solutions. It contrasts open vs closed system architectures and provides a technical overview of ELD configuration. It discusses popular ELD providers, factors to consider in selection and anticipated costs. In summary, the document is a guide for trucking companies to develop an ELD strategy and implementation plan in preparation for the December 2017 deadline.
Building Your ELD Strategy
- 1. BUILD YOUR ELD STRATEGY A review of current regulatory and compliance issues that will impact your business. November 15, 2016
- 2. BUILD YOUR ELD STRATEGY Master of Ceremony Ron Nunes - HNI
- 3. To Our Sponsors: Thank You!
- 4. BUILD YOUR ELD STRATEGY Tonight’s Speakers John Simms HNI Risk Services Marc Lonson Sean Meister M2M in Motion Edward Bass Travelers
- 5. ABOUT HNI 5 Effectively managing your insurance and benefit costs requires change. Unfortunately, most traditional insurance brokers play the traditional “quote game”, bidding insurance markets you can’t control and delivering anything but change. But, you want more than just insurance. In an era of increasing cost, risk and regulations, you want a partner that can keep you on the cutting edge. As emerging issues pop up on an almost weekly basis, you need to know how they will affect your business. You want the straight scoop from a trusted advisor that knows your business & your goals. You want INSIGHT. Perhaps our biggest difference is how we deliver insight to our clients; this is how we turn insurance into a strategic business tool.
- 6. HNI Risk Services – IL Trucking Association First in a series of technology and the effect / influence it is having on the trucking industry In Partnership with the IL Trucking Association & Travelers Insurance Next up – Video Technology (Jan 2017)
- 7. Agenda 1. Court Rulings 2. Mandate Review – What’s Required? 3. Insurance & ELD’s 4. Expectations of the Provider 5. Technical Overview – Open Platform vs. Single Provider 6. The Players 7. Making a Selection 8. Frequently Asked Questions 9. Your Time to Ask Questions ELD Mandate Final Rule Summary
- 8. ELD Mandate Court Rulings Appellate Court Denies OOIDA Lawsuit A federal appellate court has upheld the Federal Motor Carrier Safety Administration’s electronic logging device mandate, which now remains on track to go into effect starting on Dec. 18, 2017. The U.S. Court of Appeals for the Seventh Circuit rejected the argument of the Owner Operator Independent Drivers Association, which had sued to throw out the rule on the grounds that it would violate drivers’ rights to privacy under the Fourth Amendment. In denying OOIDA’s petition for judicial review, the court stated that it found that the ELD rule is “not arbitrary or capricious, nor does it violate the Fourth Amendment.”
- 9. Weekly Satellite Usage Fee Deemed Unlawful Forced-Purchase Under Federal Leasing Regulations (10-19-2016) In a closely watched decision, a federal court of appeals found a motor carrier violated the No Forced-Purchase Provision of the Federal Leasing Regulations (49 C.F.R. §376.12(i)) when it passed through a $15-per-week charge to owner-operators for sat-com network usage. Fox v. TransAm Leasing, Inc., No. 15-3203 (10th Cir. Oct. 18, 2016). While the Tenth Circuit ordered the district court to grant the owner-operators’ requests for declaratory and injunctive relief, the Court found the owner-operators’ claim for damages as a result of the violation failed as a matter of law because the owner-operators presented no evidence of actual damages resulting from the $15 usage fee. ELD Mandate Court Rulings
- 10. ELD Mandate Court Rulings While he doesn’t expect the Trump administration to reverse safety regulations, it could be “more realistic” in the way regulations are implemented. “Because FMCSA still has not published some of the technical standards for electronic logging devices, for instance, the Trump administration would be much more likely to call for a delay of the December 2017 implementation date”
- 11. BUILD YOUR ELD STRATEGY Insurance & ELD’s Edward Bass Travelers
- 12. Observations • What we are seeing • Hours of Service – CSA • Administrative time • Utilization of ELD in transportation safety management process
- 13. Hours of Service Property
- 14. Electronic Logging Devices • Device Adoption Deadline • December 2017 unless using automatic on-board recording devices. • Grandfathering Existing Equipment • December 2019- FMCSA will allow fleets to use ELD like devices meeting current standards for Automatic On Boarding Recording Devices. (49CFR395.15)
- 15. Limited Exceptions • Drivers who use paper logs for not more than 8 days during any 30 day period • Driveaway – towaway operations where vehicle is the product and being delivered • Drivers of vehicles manufactured before 2000 model year • Drivers who operate using the logbook timecard exception • Under the 100 air mile exemption – out and back within 12 hour period
- 16. Since ELD’s negate the need for supporting documents to verify driving time, FMCSA has implemented new document retention requirements to verify on duty, not driving time. Requires up to eight supporting documents per driver per 24 hour period. • Bill of Lading or documents indicating origin and destination • Dispatch records, trip records • Expense receipts related to on duty not driving • Text, email, instant messages or other mobile communication through fleet management system • Payroll, settlement sheets, or other documents reflecting to driver payment Drivers must submit 13 days and to law enforcement upon request. Company must maintain in manner that can be easily matched to log. ELD Mandate Final Rule Summary
- 17. What user documentation must be on board a driver’s commercial motor vehicle? • User manual for the driver describing how to operate • Instruction sheet describing data transfer mechanisms supported by the ELD and step by step instructions to produce and transfer driver hours of service records to authorized safety official • Instruction sheet for the driver describing ELD malfunction reporting requirements and recordkeeping procedures during ELD malfunction • Supply of bland driver record of duty sufficient to record driver’s duty status and other related information for a minimum of eight days. ELD Mandate Final Rule Summary
- 18. ELD Mandate Final Rule Summary Motor Carriers Must Set Up User Accounts for: • Carrier Employed Drivers Required to use ELDs; • Support Personnel Authorized to Manage Accounts One Account Per Driver • Company Owner/Drivers Must Maintain a Driver & Administration Account Unassigned Drive Time Must be Accounted For Keep ELD Records for 6 Months Will Switch to Driving Mode at 5mph Driving Time Cannot be Edited Drivers Must Certify Carrier Changes to ELD Records
- 19. ELD Mandate Final Rule Summary ELDs Must Electronically Transfer Records Either: “Telematics” Approach Capable of: • Wireless Web Service and • Email OR “Local” Method Capable of: • Bluetooth and • USB 2.0 Transfer In all Circumstances, Graph-Grid Required Either: • On the ELD Display or Paper Printout Must Retain 8 Records Max Per Driver Per Day • If More than 8, Must Keep Documents Nearest Beginning & End of Driver’s Shift • Must Retain in a Manner which Would Facilitate Matching • Paper Docs that are Available Digitally do not have to be Retained Qualifying Records Must Include • Driver ID; Date; Time; and Location If Driver has Fewer than 8 Documents with all 4 Elements, a Document that does not Include Time Qualifies
- 20. ELD Mandate Final Rule Summary Personal Conveyance • Not Limited • Recorded as a Special Category (Off-Duty Time) Yard Moves • Recorded as a Special Category (On-Duty Not Driving Time) Device Certification • Vendor Self-Certified to FMCSA’s Technical Specifications • Register with FMCSA • Website Listing of Certified Devices
- 21. Expectations: Minimal disruption – The solution should minimize the disruption to your team of drivers, dispatchers and back-office staff. Flexible solution - Choosing a solution that is flexible, adapting to your business needs, both now and in the years to come. (Open Architect) Ease of use - A solution that requires minimal training, making it simple enough for the whole team to get up to speed quickly. Reliable software provider with a good reputation - Provided by a supplier with experience in the trucking industry, is reliable, and offers the security of future updates and compliance upgrades as required. Comprehensive solution - A supplier that can offer a single, integrated solution that covers not just electronic logging but other compliance and productivity tools. Cost Competitive ELD Mandate Solution Expectations
- 22. ELD Mandate Solution Expectations When to Start? How long will it take you to fully transition to electronic logging? The answer will vary depending on a number of factors, including: Number of trucks and drivers. Percentage of vehicles that already have telematics devices fitted. Drivers’ adaptability to change. Amount of testing you want to do prior to launching. How close you are to the December 2017 deadline. What type of devices you Choose
- 23. ELD Mandate Solution Expectations Allowing more time gives you several advantages: You don’t rush into choosing a solution that could be the wrong choice for your business. You allow more time for the RFP process, pilot programs, UAT (User Acceptance Testing), training and unexpected scenarios. You can consider other technology upgrades to roll out at the same time. You can enjoy preferred status by customers looking for an ELD-compliant carrier. Benefit sooner from the efficiency gains a telematics system offers.
- 24. ELD Mandate Solution Expectations
- 25. BUILD YOUR ELD STRATEGY Technical Overview Marc Lonson Sean Meister M2M in Motion
- 26. Talking Points • Open Architecture vs Closed Architecture • ELD Technical Configuration • FMCSA Certified Companies • Understanding the Financials
- 27. Open vs Closed Architecture OPEN • Route4Me• Smart Witness • M2M• Vistracks ELD FMS Routing On- Board Video CLOSED Camera FMS ELD
- 28. ELD Configuration • FMCSA Minimum Requirements • 1 Hour GPS Location • No VIN Manipulation from ECM • Automatic Duty Status Changes • ON DUTY DRIVING • 5MPH • ON DUTY NOT DRIVING • 5 Minutes • 1 Minute • LOG Transfer • Email • Bluetooth • USB 2.0 • Wireless Web • NA Until Dec 2017 • Only 13 companies on fmcsa website
- 29. Understanding the Financials • What to look at for in an ELD Provider? • Platform? • Hardware? • Data? • Wireless Carrier? • Ongoing Training? • Tech Support? • Mobile Support? • Locking Devices Down? • Limited Functionality? • Customization?
- 30. Closed Systems
- 31. Closed Systems
- 32. Open Systems
- 33. Open Systems
- 34. ELD Mandate - $ Cost $ Up-front hardware cost – All ELDs involve some amount of hardware that must be installed in the vehicle. This hardware cost varies greatly, but some of the most popular system start around $600 per unit. This can be a very difficult cash outlay, especially for smaller fleets, so fortunately there are several methods for paying this up-front cost: • Cash up front: The simplest way to pay for hardware is by purchasing it outright. If your cash flow supports this large initial purchase, this often gets you the best overall pricing. • Financing: most ELD vendors that require a hardware purchase offer financing options. Customers with sufficient credit can pay for the hardware in installments, usually bundled in with the device’s monthly service plan. You’ll pay a little more in interest to the financing company, but this eases the cash flow burden of buying outright. • Lease / Service only pricing: some ELD vendors skip the hardware purchase entirely and simply bundle hardware and services together into one monthly price. This can be very attractive for fleets that struggle to get financing and are trying to avoid a large cash outlay.
- 35. ELD Mandate - $ Cost $ Monthly service – Nearly all ELD vendors will charge a monthly amount per unit. This is particularly true for products that provide a larger range of telematics features (tracking, navigation, messaging, etc.) Over time, this monthly service usually contributes more to the total cost of ownership than the up-front cost does, so it is important to pay close attention to this. Communications – Many ELDs use their own proprietary display and communication device, and the cost of transmitting data back and forth to the home office is included in the monthly service cost. However, other systems require the trucking company or the driver to provide a 3rd party tablet or cell phone that is used for display and communication. In these cases, you will have to pay for a monthly data plan to the cellular company providing the device (i.e. Verizon, Sprint, AT&T, etc) Installation – A compliant ELD must be wired into the vehicle’s ECM. A display of some kind must also be hard-mounted where the driver can see it while the truck is moving. Some ELD vendors will provide an installer at your location at no additional cost, but others charge for installs. If you have your own repair facilities or a dedicated maintenance provider, it’s often best to have the ELD provider train your own technicians on the first several units, so they can do all future installs themselves. Add Ons – ELD systems include a wide variety of features. Some of these features will come standard, while others will be an additional cost. Standard features often include GPS tracking, messaging, basic back office reporting, and Hours of Service logs. Add-on features for an extra charge can include driver navigation, in-cab video training, dash cameras, tire pressure monitoring, and more.
- 36. ELD Mandate - $ Features $ Electronic Logs – The core function of an ELD is recording a driver’s records of duty status. How easy and user friendly this is for the driver is an important consideration. Also important is how easily back office staff can monitor logs for violations and unlogged time, and make appropriate corrections. DVIR – Many ELD systems also include a system for electronically performing Driver Vehicle Inspections. GPS Tracking – Probably the most common feature of any telematics system is GPS tracking. Keep better tabs on the locations of your vehicles, often in near real time. Messaging – Two-way messaging is a common feature that allows the driver and office staff to send messages back and forth through the system. Dispatch Workflow – Some systems go beyond basic text messaging to include more complex workflow tools that allow drivers to report their progress on various tasks.
- 37. ELD Mandate - $ Features $ Navigation – Gives the driver a GPS navigation tool designed for truck routing or other appropriate restrictions. Engine data – Get information on engine performance like MPG and fault codes Safety Alerts – Get automatically notified of speeding, hard breaking, sharp acceleration, lane departure, etc. Performance Reporting – Monitor driver idle time, out-of-route miles, detention at customer locations, and more. These sort of tools are designed to help make your fleet more efficient and save money. IFTA – GPS information gathered by the system can often be used to automatically generate IFTA fuel tax reports. Some system will even create the official form and file it for you.
- 38. ELD Mandate - $ Features $ Document scanning – Some telematics systems allow the addition of a portable scanner, giving the driver the ability to scan paperwork to the back office right from his vehicle. Signature Capture – Some systems use a portable display that can double as an electronic signature capture device. Eliminates paperwork, and makes signed shipping documents available instantly. Tire Pressure monitoring – More and more ELDs are becoming integrated with tire pressure monitoring solutions so you can see the status of your fleet’s tires in real time. Dash cameras – Dash cameras are still rare, but becoming more popular. Some telematics systems integrate directly with dash cameras. Video training – Send training videos to your drivers that they can watch on their ELD screen. Integration with TMS – If you use transportation management software in your back office, it is important to find out how well a proposed ELD integrates with it. A good integration allows things like viewing GPS location and HOS time directly from the TMS, as well as sending out load information and dispatch messages automatically.
- 39. ELD Mandate - $ Return on Investment $ Fuel cost savings – The best way a telematics solution can save money is on fuel cost. ELDs can usually read engine data to give you insight into your least fuel efficient vehicles. And, you can monitor and reduce driver idling time and out-of-route miles using GPS tracking. Maintenance – Constant access to real-time engine data can help you spot issues and repair problems before they cause a costly breakdown. Driver incentives – Better monitor your drivers’ behavior and performance. Incentivize low idling, on-time delivery, safety, and many other desired behaviors that can save your company money. Safety – Accidents are extremely expensive. Many ELD devices also provide safety monitoring tools like speeding and hard breaking alerts that can help you address safety issues before they turn into accidents. DOT Violation fines – ELDs do a fantastic job at minimizing hours of service violations. Form and manner violations go away almost entirely, and achieving violation-free logs becomes much easier. Avoiding fines during roadside inspections and audits can quickly become a large cost savings.
- 41. ELD Mandate Frequently Asked Questions Can Smart Phones & Wireless Devices be Used as ELDs? Yes, as Long as They Meet the Rule’s Technical Specifications Portable ELDs must be Mounted while Driver is Operating a CMV and be Visible to the Driver from a Normal Driving Position Are Rental/Leased Trucks Exempt? The Rule does NOT include an exemption for leased or rented CMVs. Will ELD’s eliminate people in my Safety Department? NO!
- 42. ELD Mandate Frequently Asked Questions What Happens if a Device Malfunctions? The Driver Must: • Notify the Carrier in Writing within 24 Hours; • Create paper RODS for Current 24 Hour Period and Previous 7 Days, Unless Data can be Retrieved from the ELD; • Prepare Paper RODS until ELD is Repaired or Replaced The Carrier Must: • Repair or Replace ELD within 8 Days of Notification or Malfunction Discovery; • If Needed, Carrier Can Request Extension from FMCSA within 5 Days of Driver Notification of Faulty Device
- 43. ELD Mandate Frequently Asked Questions How Does a Driver Account for HOS Generated on Multiple Devices that are Incompatible? If a driver uses multiple ELDs and the data from one system cannot be uploaded into the other system, the driver must enter missing duty of status information into the ELD currently being used or provide a printout from the other system(s) for the current 24 hour period and the previous 7 days.
- 44. Questions?
- 45. THANK YOU!