Next week the Federal Motor Carrier Safety Administration is set to issue a new rule requiring truck drivers to begin using new electronic logging devices [ELDs or “eLogs”] to track their hours behind the wheel. Why is this noteworthy? Because by and large, the drivers hate this proposal, with many threatening to bolt the business rather than become slaves to the new technology.
And if that happens, the current capacity crunch is going to get, well, crunchier.
The concerns are quite real. In a recent survey by Overdrive magazine, 71 percent of independent drivers and small fleet owner-operators said they planned to quit the industry if the new regulation goes into effect. According to an Overdrive analysis, that could translate into a loss of 260,000 trucks from the nation’s roadways – or 10 percent of current capacity.
Making matters worse, some believe that even the drivers that keep climbing behind the wheel will still take a hit.
“eLogs will dramatically decrease the capacity of the carriers who are not already doing it and decrease their profitability as a result,” Donald Broughton, an analyst at Avondale, recently told the Wall Street Journal. “A lot of those guys will go out of business.”
The e-log hubbub stands to exacerbate a problem that’s already festering in the industry: a driver shortage that’s been a key factor in rising shipping costs. According to the 24th Annual Trends and Issues in Transportation and Logistics study, transportation rates are expected to continue to climb well into the foreseeable future.
“For the first time in our careers, carriers rather than shippers are in the position of power in the relationship,” writes the study’s authors, Mary Holcomb of the University of Tennessee, and Karl Manrodt of Georgia College. “And the shift has put new meaning and emphasis on the familiar terms ‘favored shipper,’ ‘shipper of choice’ and ‘carrier-friendly freight.’”
It’s not a pretty picture if you’ve got goods to move. And it makes the case for using a quality transportation management system [TMS] in your supply chain even more compelling.
A TMS can do a lot of things, but what it does best is lower freight spending. Studies have shown that most businesses use their TMS to:
- Increase the use of preferred carriers
- Improve the routing of shipments
- Reduce carrier overages
- Use lower cost modes of transport
Aside from just optimizing your shipments, a TMS with an expansive, built-in carrier network gives you deep visibility into the carrier marketplace. Through benchmarking and data analytics tools you can easily determine what fair market freight rates are – and make changes if you find you’ve been paying too much. That’s the kind of upper hand you need to stay competitive.
Choosing a cloud-based TMS like Kewill Transport will also get you up and running faster. There are no upfront infrastructure costs and with quick implementation you could be saving big bucks within a few months.
Regardless of what happens later this month with the ELD ruling, capacity is likely to continue to dwindle and transportation rates will keep increasing. So while truck drivers might not be happy about the technological intrusion in their cabs, the people who count on them to deliver their goods should be embracing the benefits that a cloud-based TMS can bring.
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