In a recent Business Insurance report, fleet operators and independent operators are anticipating that safety upgrades, such as using electronic logging devices (ELDs), will not only improve safety, but also influence other operating costs, including insurance premiums. According to reporter Diane Mahoney, the Department of Transportation estimates that requiring ELDs will result in annual net savings of more than $1 billion, largely from reducing the required paperwork. It is still unclear as to whether or not insurers will change their underwriting and recognize the safety improvements. Business Insurance has more.
.“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.
Issued Dec. 10 by the U.S. DoT, the new rule requires commercial vehicle drivers to use ELDs to track their driving time, and eliminate paper-based logging paper, by Dec. 18, 2017. For those already using an automatic onboard recording device, like AOBRD, operators have until Dec. 16, 2019 to comply. Mahoney reports that an AOBRD installed before the ELD compliance date is considered “grandfathered.” To help with amortization drivers and carriers may continue to use AOBRD instead of an ELD for four years from the final rule’s publication. However, AOBRD’s that have been updated to meet ELD standards, including certification registration on the Federal Motor Carrier Safety Administration website, is not considered a grandfathered AOBRD but rather an ELD.
Aimed at discouraging drivers from staying on the road too long, something long understood as a primary contributor to accidents. The report notes that according to a federal agency ELD’s are estimated to save 26 lives and prevent 562 injuries from commercial truck crashes every year,.
Recent tragedies involving over-extended drivers prove the value of the new rule. Tracy Morgan’s bus for example, was hit by a driver who was fatigued from driving too long. “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 Abraham S. Levine, chief operating officer of Lisle, Illinois-based VisTracks Inc., who, according to the story leads a company that 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.”
Steve Bojan, Milwaukee-based vice president of fleet risk services at Hub International Ltd., agrees ELDs will make route planning critical but said he expects some challenges as ELD use makes tracking hours more rigid. He explained that there’s not the “fudge time” that manual tracking systems can permit. This, he said, makes route planning by drivers more important if they need to find a place to park and layover.
However, not everyone is thrilled. Dec. 11, the day after the mandate was announced, The Owner-Operator Independent Drivers Association, which represents the interests of small-business trucking professionals and drivers filed a lawsuit over the new regulation in the 7th U.S. Circuit Court of Appeals in Chicago. Ther association said it is concerned the ELD mandate wouldn’t protect drivers from being harassed regardless of the fact there is a clause that prohibits it.
Essentially the O-OIDA position is the devices could be used by employers to force drivers to always work to the maximum hours permissible. For the most part, they may have a point, but the reality is better data will promote honest accounting and transparency that will improve operations and safety for drivers.
One source explained that several ELD/telematics vendors provide a large amount of data on driver safety performance which, he said, 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.
Will the new rule effect premiums? For the most part the insurers quoted in the story were noncommittal. However, your personal underwriter may see it differently. It’s obvious that if an operator has highly validated operations data from the institutionalized use of ELDs, there will be a positive impact on risk and accordingly your insurance carrier’s risk assessment. 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.The bottom line according to the report is simple: electronic logs will reduce the number of fatigued drivers on America's roads.
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