December 16 (2017) is the day the government’s electronic logging device (ELD) rule officially goes into effect. On that day, all professional truck drivers traversing America’s roads will have to log their hours electronically. Paper logs will no longer be accepted as proof that drivers are maintaining compliance with regulations that control the number of hours they drive.

With the ELD deadline now just six months away, some in the industry are speculating that its implementation could lead to market consolidation as smaller carriers and owner-operators elect to cease operations rather than comply. Those same carriers and truckers have failed thus far in mounting a successful court case to block the rule.

Resistance to ELDs

The resistance to ELDs is a two-fold resistance. First is the idea of privacy. Owner-operators insist that electronic logging is an invasion of personal privacy. Because the rule requires truck owners to install ELDs in their trucks – ELDs that will automatically collect data and store it for compliance purposes – opponents claim that such data collection and storage is a violation of constitutionally protected privacy.

A second problem, according to some owner-operators and smaller trucking firms, is the amount of financial investment required to become compliant. ELD devices are not cheap to install. Moreover, the expense could be quite significant for some firms just barely getting by as it is. These would rather stick with the paper logs they believe have served the industry well for decades.

The Potential for Consolidation

Let us assume that opponents of the ELD rule fail to have it overturned in court. What does that mean for the trucking industry and logistics industry as a whole? The potential for market consolidation instantly comes to mind.

Consider a national carrier like C.R. England, for example. They can more easily absorb the cost of transitioning to electronic logging. The total economic impact on them will be negligible. But a much smaller trucking company with only a few rigs could run into serious trouble. Installing new ELD devices in all their trucks could significantly interrupt cash flow, thus hindering their other business operations. The same sorts of impacts would affect individual owner-operators as well.

If it is true that some smaller carriers and owner-operators will simply bow out in order to avoid the ELD mandate, someone has to be there to pick up the slack. That’s where large carriers like C.R. England come into play. They will be ready to snap up the available freight. They will be ready to increase their own market share by buying up smaller firms that would otherwise close. Significant market consolidation is a very real possibility here.

It could also be that those threatening to close up shop are just blowing smoke. A few years ago, truck drivers in the UK were put under a mandate to undergo new competency training and certification in order to keep their licenses. As the deadline for that training approached, larger numbers of drivers said they would leave the industry rather than comply. It never materialized. At the end of the day, undergoing the training was worth it for drivers to keep their jobs. We could see the same thing here with the ELD rule.

December 16 will be here before we know it. Even as the kids are dreaming of Santa Claus and their parents are making plans for holiday gatherings, truck drivers and carriers will be busy installing ELD devices. Electronic logging will become the law of the land with one stroke of the clock. And it just may usher in an era of market consolidation.

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