Frost & Sullivan, a growth partnership company, revealed in their recent study that the ELD mandate is expected to impact the trucking industry by providing a myriad of growth opportunities.
Considering how more ELD manufacturers will register their products with the Federal Motor Carrier Safety Administration (FMCSA), market fragmentation is to be expected due to the ELD ecosystem being crowded.
Specifics of the study
Frost & Sullivan’s research, titled “Growth Opportunities and Implications of the Electronic Logging Device (ELD) Mandate in North America,” was conducted to analyze developments in the ELD industry for Commercial Motor Vehicles (CMVs) in Canada and North America.
Among other things, the major focus of the study is on business cases, ELD pricing, packages, and solution types, together with the importance of value-added services and telematics.
In addition to the points above, other highlights of the research and the expected ELD impact on the trucking industry include:
- Market dynamics and trends, such as market potential, certification, and product trends
- An overview of the timeline comparison between the U.S. and Canadian ELD mandates
- Their own impartial guide for buyers to use when buying ELDs
- Key challenges pertaining to the requirements of the self-certification process, AOBRD to ELD shift, and data security
With all the items covered in the study, the various players in the trucking industry (like enterprise fleets, owner-operators, or small fleets) are sure to find Frost & Sullivan’s data to be relevant.
ELD market’s anticipated growth
The study also revealed that the ELD market is expected to record a compound annual growth rate (CAGR) of 20.2% from the previous year (2016) to 2023.
Possible investors are likewise expected to set their eyes on the ELD marketplace because of the potential growth it brings to startups and Original Equipment Manufacturers (OEMs), along with other entities that operate in areas that overlap with the ELD market.
“Nearly 34 percent of North American fleets operate as small fleets with less than 50 vehicles, relying on manual practices. ELDs could prove to be a driving factor for telematics adoption in this space,” said Gokulnath Raghavan, the Mobility Senior Research Analyst at Frost & Sullivan. “Furthermore, small and medium fleets hold 60 to 70 percent untapped potential for standalone ELD solutions.”
Transitioning to ELDs and the accompanying challenges
The top issues raised by the Truck Rental and Leasing Association (TRALA) to the FMCSA regarding transitioning to ELDs are reliability, data transfer, and liability.
Here are other future challenges that can be expected as mentioned in Frost & Sullivan’s site:
- The need to seamlessly switch from AOBRD to ELD without much effort
- Fleet operators having a hard time finding the right ELD provider in a fragmented ecosystem
- Relevant parties’ lack of eagerness to analyze post-compliance
- Doubts over the self-certification process due to inadequate verification and inspection procedures
According to Raghavan:
“The ELD market is fragmented with more than 50 vendors currently offering application-based, AOBRD- and ELD-like solutions. To be successful, vendors will need to extend their product portfolios, develop competitive pricing, hold industry knowledge and expertise, build solid customer relationships and form collaborative partnerships.”
ELD impact and benefits
The previous logging devices that were introduced to the trucking industry like the Electronic On-Board Recorder (EOBR) and Automatic Onboard Recording Devices (AOBRDs) were quite lacking in features.
ELDs, on the other hand, are packed with advanced features that trucking companies can leverage to grow their business.
Following are just some of the many benefits that trucking companies can enjoy from using ELDs:
- Avoid hefty fees associated with road violations and penalties
- Reduced fuel wastage
- Minimize road accidents
- A better work environment for truck drivers
- Improved Compliance, Safety, Accountability (CSA) scores
- Seamless communication between fleet managers and drivers
- Reduced administrative expenditures that come with filing IFTA fuel tax reports
- Improved driver performances
- Fewer vehicle breakdowns
- Increased productivity for drivers, fleet managers, and carriers
When carriers have access to these benefits, optimizing the way they conduct their trucking operations becomes easier. That a big ELD impact for trucking.
Drivers, on the other hand, will have a far easier time driving since ELDs would record their driving time automatically. It means they no longer need to keep a mental note of how many hours they spend driving or if they are near their hours of service limits.
Dangers of last-minute ELD adoption
The ELD mandate will take effect this December 18, 2017. That’s two months away from now.
If fleets and owner-operators delay their transition to ELDs and only take action at the eleventh hour, they are bound to experience a number of problems, such as:
- ELD prices might go up because of high demand
- ELD manufacturers might face an ELD supply shortage, at which point carriers would be without ELDs past the ELD implementation date
- Carriers won’t have ample time to screen prospective ELD providers, therefore, increasing the chances of them partnering with the wrong provider
These are just some of the many reasons why carriers should start their transition as early as today. The more they delay, the more they expose their businesses to such troubling scenarios.
If you are still without a compliant ELD solution, try Motive.
The Motive ELD is FMCSA-registered in the U.S., and certified in Canada. It’s affordable and packed with many useful fleet management features for fleets of all sizes.
To get a glimpse of how our ELDs work, request a free ELD demo today.