This article is an excerpt from Telematics-Driven Transformation, available for free download here.
In Part One of this article series, we looked at the regulations mandating adoption of ELDs. Here in Part Two, we examine best practices for complying and realizing value.
Best Practices for Compliance and Beyond
Based on the experience to-date of US carriers and fleets, there are a number of best practices that can be applied to ensure a smoother transition, minimize disruption and capacity loss, and maximum benefits from ELD adoption. These can be grouped into:
1. Organizational Alignment
Establishing a Vision, Goals, and Strategy
It is vital that each carrier or private fleet company has a clear vision for its ELD program. A steering committee consisting of key stakeholders — fleet managers, operations, customer and driver representatives, and IT — should be formed to clearly define the goals, strategy, timeline, metrics/targets, and expected benefits for all stakeholders. While the initial goal may be compliance with regulations, the longer-term goals should include benefits and value beyond compliance (see at the article end: From Burden to Benefit). The vision, rational, timeline, and expected benefits for all stakeholders should be continuously shared and reinforced across the organization.
Policies and Procedures
Company policies and procedures need to be updated to include telematics and ELD compliance, such as the process for logging a driver’s status, doing inspections, maintenance, and so forth. The policies should clearly indicate how the ELD data will be used and what it must not be used for. Harassment using ELD data is forbidden by law and anti-harassment policies should be clearly laid out. Policies requiring compliance and forbidding driving violations should be unambiguously spelled out, along with consequences for non-compliance.
Communication and Buy-In — Helping Drivers Through the Adjustment Period
Communication and buy-in across the organization are critical to the success of ELD implementation. Frontline workers can rebel and undermine an initiative if they feel threatened or don’t understand it. In the case of ELDs, it is natural for drivers to be wary about ‘big brother’ tactics if they don’t understand how the system and the data it collects will be used. Nobody likes to be put under a microscope. Furthermore, the ELD takes away the inherent flexibility of the prior paper-based system, which let the driver ‘stretch the rules’ a bit, such as when there was excess detention, to finish the job and get home.1 That is no longer possible with the ELD recording every minute with precision.
Therefore, it is essential to have a plan on dealing with this new reality. It is important to let drivers know that you have their back. The anti-harassment policy should be clearly communicated to drivers, along with a confidential whistle-blower mechanism to use if the policy is not being followed by management. A system should be put in place to ensure that drivers always have somewhere to stop, instead of being stranded. Show drivers that you are working with shippers and consignees on reducing detention. Adjust route planning to account for stricter rules enforcement. Communications and dialog with drivers and operations should begin well before implementation and continue, often, to keep reminding drivers and others of the goals and benefits of the program. Providing a mechanism for drivers to express their concerns and grievances privately can help in identifying where some extra care (and possibly adjustments) are needed.
Training of drivers, administrators, and managers is essential and should begin early in the implementation. Drivers should be trained on the goals of the program, the importance of compliance and consequences of non-compliance (for the company and individual), how to prevent violations, how the data will be used (and not used against them), how to use the device and the driver’s app, and procedures for tracking and editing HOS. Drivers need to understand the policies and procedures. They should be strongly encouraged to not try to deal with HOS limitations by trying to ‘beat the clock’ with speeding or reckless driving.
Route planners and dispatchers should be shown how to create HOS-compliant routes, accounting for potential delays. Managers should be trained on how to use the system, dashboards, KPIs, and notifications. Critically, anti-harassment policies need to be clearly communicated and understood.
Clear compliance metrics should be set, such as for clean inspection rates and violation rates. When the organization is ready to try for additional performance improvements, then value-add goals can be put in place, for example reduced fuel consumption, reduced accident rates, or increased fleet utilization. Drivers and managers can be recognized and rewarded for meeting or exceeding goals. When individuals or units fall short of goals, the root causes should be diagnosed and jointly resolved with the team. Some carriers and fleets have switched from paying drivers by the mile to paying by the hour to incentivize safety first.
Start Implementation Sooner Rather Than Later
All of this takes time, starting with organizing the steering committee, setting vision and goals, setting up training programs, evaluating and selecting devices, apps, and software, acquiring, implementing and testing. Organizations that wait until just before the deadline will have to skimp on all of these and will pay the price. Furthermore, the benefits that can be had from value realization can measurably outweigh the cost of the program. It makes sense to realize these benefits sooner rather than later.
2. Value Realization
Carriers and fleet owners that implement ELD merely to comply are missing significant value generation opportunities. The ELD steering committee should be tasked with seeking ways to generate value from the ELD investment and creating a prioritized roadmap for implementing those plans. The first step in the roadmap will likely be basic implementation for compliance purposes. After that can be operational improvements and transforming the customer’s experience. New use cases, along with the expected benefits and performance targets, should be explored and defined. Examples of potential use cases and sources of additional value are detailed in parts four and fiveof this article series.
3. Driving Continuous Performance Improvements
Defining and Monitoring KPIs
Each phase of the program should have a clear set of goals and KPIs for measuring success. To enable monitoring of progress, strong dashboard, alerting, and analytics capabilities should be considered during the evaluation and selection of ELD devices and software. Dashboards can help managers and individuals monitor progress towards goals and identify areas that need more work. These might include things like fuel consumption, safe driving behaviors, HOS compliance, fleet utilization, maintenance costs, and more. ELD data can also be used to improve customer behaviors. ELDs can provide precise data about detention times, which can be used to work with customers to reduce excessive dwell times at customer facilities.
From Burden to Benefit
When ELD is implemented purely to comply with regulations, and no efforts are made to realize additional benefits and value, then it can be a burden on carriers. Beyond the cost of the devices and ongoing subscription costs, the ELD mandate effectively reduces capacity and lengthens transit times for those carriers who previously ‘got away with’ non-compliance under the old paper-based system. The tightened capacity has exacerbated the driver shortage, resulting in higher wage rates, though not necessarily higher total wages for individual drivers.2
However, carriers and operators have an opportunity to claw back significant value from their ELD investment, for a substantial positive ROI. There are many different use cases for driving value to carriers, fleet owners, drivers, and their customers. In parts four and five of this article series, we explore in depth some of the key use cases for driving value.
In Part Three of this article series, we look at key elements to realize value from ELD adoption and what the impact of these regulations has been on individual companies, and more broadly across the industry.
1 Note, there are ongoing discussions about modifying the regulations to provide some flexibility in meeting HOS requirements.The current US administration appears to be receptive to those kinds of modifications. — Return to article text above
2 Drivers paid by the mile, who ‘stretched’ the HOS limits using the paper logs before the ELD mandate, are now forced to strictly comply and thereby drive fewer hours and miles. Thereby, even with increased per-mile wages, their total pay may have shrunk. Drivers who were already strictly compliant with HOS rules, likely saw their paychecks increase in 2018.
To view other articles from this issue of the brief, click here.