A federal appeals court has upheld the federal government's mandate that all commercial truck drivers have electronic logging devices (ELDs) in their cabs by Dec. 31, 2017, dealing a severe blow to the nation's largest truck-driver group, which asked the court to strike down the rule as unconstitutional.
A three-judge panel of the U.S. 7th Circuit Court of Appeals ruled late yesterday that the Federal Motor Carrier Safety Administration (FMCSA) had satisfied the concerns raised by opponents about the controversial mandate, which had been blocked by the same court more than five years ago on grounds that it had failed to protect drivers from fleet owners and operators that might use the technology to harass them about their whereabouts. The agency in December 2015 published a modified rule to embed what it termed strict language protecting drivers against any efforts to use the equipment to harass them.
Most important, the appellate court panel rejected claims by the Owner-Operator Independent Drivers Association (OOIDA) that the rule violated 4th Amendment rights against unreasonable searches and seizures by requiring the prolonged use of a warrantless GPS device.
In a statement, OOIDA President Jim Johnston said the group is weighing a response to the ruling. Johnston has previously called the ELD mandate, which would end drivers' decades-long reliance on paper logbooks, the most far-reaching regulation in the trucking industry's history.
The court held oral arguments in mid-September on the issue. In the weeks that followed, a consensus emerged among industry analysts and executives that the constitutional argument would fall short and that the court would uphold the mandate. Such a scenario would likely be too much of a legal hurdle for OOIDA to overcome, according to analysts.
As of late last year, FMCSA estimated that about 3.4 million drivers would be affected by the ELD mandate. Many large truckers have already installed ELDs, but smaller operators and independent drivers have held back, concerned about compliance costs and uncertain about which way the legal winds would blow. About 20 to 40 percent of all trucks now have ELDs, according to industry estimates. Those estimates, though, have much variability to them.
Publicly traded truckload carriers have estimated that ELD compliance could remove between 4 and 8 percent of capacity, as small carriers and solo drivers exit the market due to higher costs and rigorous hours-of-service monitoring. Scott Group, analyst for investment firm Wolfe Research LLC, said in a note late today that the mandate "should make it tougher for small carriers to cheat" on the hours-of-service rules.
The ELD issue should have little impact on truckload supply during 2017, in part because many carriers will wait until year's end to comply, analysts said. A sustainable pickup in demand will have a more material impact on capacity next year than will ELD compliance, they said. In the near term, however, demand doesn't appear to be picking up in a meaningful manner, they added.
Copyright ©2024. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing