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Truckers hope safety upgrades reflect on premiums

Truckers hope safety upgrades reflect on premiums

Using electronic logging devices to record drivers' time on the road also will allow the trucking industry to track fleet performance.

Some industry members see this improving safety and savings, but others are not so sure.“We haven't heard yet from insurers that they'll change underwriting — and it's too early to know — but from experience in this industry, when technologies ultimately result in improved safety, the insurance companies recognize that and the fleets ultimately benefit,” said Dave Osiecki, the Arlington, Virginia-based executive vice president and chief of national advocacy at the American Trucking Associations.

The new rule, issued Dec. 10 by the U.S. Department of Transportation, requires bus and truck drivers to use electronic logging devices, instead of paper logs, to track their driving time by Dec. 18, 2017, or by Dec. 16, 2019, for those already using an automatic onboard recording device, or AOBRD.

An AOBRD installed before the ELD compliance date is considered “grandfathered.” Drivers and carriers may continue to use an AOBRD instead of an ELD for a period of four years from the publication of the final rule. However, an AOBRD that has been updated and meets the standards for an ELD, including certification registration on the Federal Motor Carrier Safety Administration website, is not considered a grandfathered AOBRD but rather an ELD.

The rule aims to discourage drivers from staying on the road too long, which is known to contribute to accidents. It's estimated to save 26 lives and prevent 562 injuries from commercial truck crashes a year, according to the federal agency.

“Look at Tracy Morgan. He was hit by a driver who was driving too long and was tired,” Abraham S. Levine, chief operating officer of Lisle, Illinois-based VisTracks Inc., said of the 2014 crash in which the comedian was seriously injured and another passenger was killed when a Wal-Mart Stores Inc. truck hit their limousine in New Jersey. “The insurance industry would have to pay out on these kind of incidents.”

“The ELD has the capability to provide significant amounts of engine information that will not only allow you to make sure your fleet is being driven correctly and optimally, but you can also measure if it is being driven illegally,” said Mr. Levine, whose company provides DOT-compliant software applications for companies that use ELDs to monitor driver hours, track vehicles and other compliance metrics. “For example, speed alerts can be programmed in and if the vehicle is driven over a certain speed it will send an alert to the home office.

“You can see how you can get a lot of financial, legal, as well as insurance benefits in monitoring to see if your drivers are doing the right thing,” Mr. Levine said.

The Department of Transportation estimates requiring ELDs will result in annual net savings of more than $1 billion, largely from reducing the required paperwork.

Mr. Osiecki said he sees similar efficiencies.

“Companies that have already adopted these devices figured out that they can better plan their loads and the drivers can better plan their day and their routes,” he said. “It is a tool to enhance productivity and efficiency, but it won't happen right away; there's a productivity loss initially until fleets figure it out.”

Steve Bojan, Milwaukee-based vice president of fleet risk services at Hub International Ltd., agreed ELDs will make route planning critical but said he expects some challenges as ELD use makes tracking hours more rigid.

“There is not the fudge time that there was in the past under the manual tracking system,” he said. “This makes route planning by drivers more important if they need to find a place to park for a layover or to be near a customer for an early delivery.”

One challenge has already come from the Owner-Operator Independent Drivers Association, which represents the interests of small-business trucking professionals and professional truck drivers and on Dec. 11, the day after the new mandate was announced, filed a lawsuit over the new regulation in the 7th U.S. Circuit Court of Appeals in Chicago.

Scott Grenerth, Grain Valley, Missouri-based regulatory affairs director for the association, said it is concerned the ELD mandate won't protect drivers from harassment despite a clause to that effect.

“If you use it as a fleet management tool, it can be used to push drivers to maximize every hour available to drive,” he said. “That is not a safety tool, when it can be used for the exact opposite purpose. This does not translate to an automatic safety benefit.”

Still, Mr. Bojan said he sees the benefit of the additional data.

“Many of the ELD/telematics vendors provide a large amount of data on driver safety performance,” he said in an email. “This goes significantly beyond hours of service. Many of the systems provide key safety metrics such as hard-braking events, rapid-acceleration events, vehicle-upset events and speed limit-violation events.”

But other insurers wouldn't go so far as to predict underwriting changes.

“In general, I would not expect a change in the way that insurance policies are written,” Michael Gramm, Chicago-based head of business lines for trucking company insurance at XL Catlin, said in an email. “What I do expect is that electronic logs will reduce the number of fatigued drivers on America's roads.”

The rule, which will affect about 3 million drivers, according to the Department of Transportation, includes those coming into the U.S. from Canada and Mexico.