Canada’s Electronic Logging Device (ELD) Mandate is set to affect intermodal transportation favourably in rates, fuel prices and capacity. This is based on the Intermodal Competitive Index (ICI) of the freight transportation forecasting firm FTR.
Earlier this week, the condition of intermodal versus truck was described as ‘moderately favourable’ according to freight transportation forecasting firm FTR. Their Intermodal Competitive Index (ICI) showed a slight increase in November to a level of 5.0.
The ICI looks compares North American intermodal sector and over-the-road trucking. A negative number indicates conditions are unfavourable. The higher the positive number, the better the favourability for the intermodal sector. Factors affecting the level are intermodal rates, fuel prices and truck capacity.
Despite the current state, FTR predicts that the ICI may deteriorate soon because of normal seasonal factors. Thankfully, the ICI is anticipated to start rising again until the end of the year. The rise will be due to the truck Electronic Logging Device (ELD) federal mandate.
“While the new administration’s more restrained philosophy with regard to regulation may have some eventual downstream effects on the trucking environment, we believe that the ELD regulation, which has already been formalized into law, will not be recalled…..While the extent and precise timing of the capacity effects of the ELD mandate are open to debate, there seems to be little doubt that its capacity effects will result in some tightening of truck availability which should work to the benefit of intermodal” said Larry Gross, Partner at FTR and principal author of its Intermodal Update, in a statement.
Canada Soon to Implement ELD Mandate
The Canadian Council of Motor Transport Administrators (CCMTA) is expected to have a final rule on its own ELD mandate early this year. A Canadian compliance date will likely occur for early next year.
The mandate received a lot of enthusiasm from the CCMTA as discussions about implementing a ELD mandate in Canada has been ongoing for nearly ten years.
“Though safety and consistency with U.S. guidelines were primary factors behind the change, Canada’s ELD mandate was also motivated by financial considerations as its trucking industry hopes to compete with U.S. carriers who have seen the economic benefit of using electronic logging devices” writes Keep Truckin, a blog about fleet management.
“Canadian fleets who implement and train drivers on ELDs well before the 2018 deadline will be more competitive with U.S. fleets already reaping the benefits, including fewer hours-of-service and form and manner violations and improved Compliance, Safety, and Accountability (CSA) scores.”
Although the Canadian ELD mandate will be a year behind it’s American counterpart, the decision is the right step to improve competitiveness. A high volume of trade is conducted between Canada and the U.S. In fact, the two countries trade around trade $662 billion worth of goods and services with one another annually.
What the ELD Mandate Will Mean for American and Canadian Fleets
Having ELDs be the standard will benefit fleets in a few different ways. For one, the amount of paperwork will be greatly reduced. Secondly, dispatchers will be kept up-to-date with the condition of the drivers, helping them with planning better loads. Thirdly, it will eliminate paper logs and with that, the headache that comes with maintaining it.
The American ELD mandate is only 11 months away, but is already predicted to have a positive impact on the intermodal sector. Canada will follow suit next year. Fleets in both countries will benefit in regards to increased safety, planning and efficiency. The North American Intermodal sector has a lot to look forward this year and the next.
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