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Transportation & Logistics

For more than a year now, ITR economists have consulted with businesses (via our Leading Indicator programs) to increase their prices as a means of protecting their profitability from higher labor and material costs. However, there’s another reason why companies should look for opportunities to raise their prices as we head into 2018: the Electronic Logging Device (ELD) rule for commercial trucks.

Many business owners and decision makers are not aware of the imminent (December 18, 2017) implementation of this rule, which was congressionally mandated as a part of MAP-21. The rule is intended to help create a safer work environment for drivers and make it easier and faster to accurately track, manage, and share records of duty status (RODS) data. An ELD synchronizes with a vehicle engine to automatically record driving time for easier, more accurate hours of service (HOS) recording.

According to the American Trucking Association, even though the rule is not slated for major enforcement until April of next year, it could cause many independent truck owner/operators and some smaller fleet operators to go out of business. In an industry where capacity is already tight, this will certainly drive shipping prices higher.

The resulting pressure on logistics prices will catch many enterprises off guard. As such, if you have not thought about the impact of this rule on your business, now would be a great time to do so as you finalize your plans for 2018.

Alex Chausovsky
Senior Analyst