Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.dmtmag.com/i/835233
42 commercial carrier journal | june 2017 SPECIAL REPORT: ELECTRONIC LOGGING DEVICES ly using ELDs, either," he says. Wilson estimates that less than half of the carriers that work with Barton have not implemented ELDs yet, based on their pushback when required to use tracking tools. "If you haul for Barton Logistics, you agree to use tracking tools," he says. Status quo — for now ELDs aren't likely to have much of an impact on trucking rates prior to De- cember 2017, says Craig Fuller, founder and chief executive officer of TransRisk. Fuller believes any impacts are more likely to be seen in the spot market – until March 2018. Although enforcement is supposed to begin in December, the execution of the mandate likely will be different by state, Fuller says. True enforcement may not begin until more insurers start requiring carriers to provide proof of ELD compliance before selling policies, he says. Fuller has a vested interest in rates becoming volatile because of ELDs and other factors. He founded TransRisk to offer a "trucking futures market" to shippers, brokers and carriers seeking to hedge rate volatility risk. Similar to futures and derivatives markets for other industries, contracts with TransRisk will be settled finan- cially rather than exchanged for actual goods or services. "A truck will not show up at your door because you bought a future (con- tract)," he says. Fuller got the idea for TransRisk in 2014 while consulting for a high-tech brokerage firm and day-trading on the side. He researched a futures market for maritime transportation called the Baltic Exchange. TransRisk provides rate data and information to its market participants. From what Fuller has seen in the data the company uses from DAT, spot-mar- ket rates are "slowly but surely coming back up," but there has not been much volatility caused by ELDs or any other source. Anecdotally, carriers that have im- plemented e-logs have indicated they've lost between 2 and 6 percent utilization, he says. Even if the overall trucking industry were to lose 2 percent of its to- tal capacity in the next 12 months, the rate impact would be minimal, Fuller believes. But if 6 percent of capacity were taken out of the market, the impact on rates would be "exponentially more" because of how the supply chain works, he says. Shippers likely would overbid rates to move their loads more quickly. Fuller says trucking capacity may decrease by a "couple percent" in 2018 because a small segment of the industry – primarily small fleets and owner-op- erators – could lose their profit margins due to hours-of-service compliance. e ELD rule's full impact will be difficult to gauge, he argues, since other variables could play a factor for the remainder of 2017 and into 2018, including e-commerce growth, changes in trade policy, government spending and more. While owner-operator analyst Todd Amen agrees that any bump in rates from the ELD mandate will come later than initially thought, he foresees a slightly diffferent timeframe. Amen is president of ATBS, the country's largest owner-operator business services firm that works with about 40,000 drivers — the well from which the company draws its mileage and income data. "We believe a rate increase is coming, not by the end of 2017, but in 2017 and into 2018," says Amen, who predicts ELD implementation will spur rate growth until about mid-2018 and that rates could grow by as much as 10 per- cent during that time. Some indications that rate volatility could begin ahead of the December From what TransRisk has seen in the data the futures provider uses from DAT Solutions, spot-market rates are coming back up, says Craig Fuller, TransRisk founder and CEO.