National ‘Roadcheck’ could show impact of ELD mandate on trucking industry

The Commercial Vehicle Safety Alliance’s 30th annual International Roadcheck starts Tuesday (June 6), and analysts believe the impact of the 72-hour event sheds light on how the ELD mandate will affect the trucking industry come Dec. 18.

Trucking/transportation analyst Brad Delco of Stephens said the annual Roadcheck events “have a notable impact to (truckload) capacity as measured by the Market Demand Index and Shipper Truck Searching metrics.” Roadcheck inspectors complete the North American Standard Level 1 Inspection, or the most thorough roadside inspection. The 37-step procedure looks at the driver and the vehicle. Drivers must show a driver’s license, hours-of-service documents, registration, shipping information and will be tested for drug or alcohol use.

This year, inspectors will focus on cargo securement along with checking vehicles’ brakes, couplings, driveline and exhaust systems. Last year, 21.5% of vehicles were in violation and put out-of-service during the event, according to Delco. And, 3.4% of drivers were found to be in violation, mostly exceeding hours-of-service requirements or falsifying logbooks. This is consistent with the results of the previous Roadcheck events, which typically happen in the first or second week of June.

Over the past four years, the Market Demand Index, which measures freight loads compared to capacity, rose an average of 27% in the week of the Roadcheck, from the previous week.

“We then looked at ‘Truck Searching’ metrics, which measures searches of available trucks by shippers,” Delco said. “We found that during Roadcheck week, truck searches went up by 48% on average for shippers looking for capacity to service their freight.”

These increases “suggest to us that (truckload) capacity becomes strained during the annual Roadcheck as a result of (in our opinion) small carriers who are not complying with (hours-of-service) simply park their trucks over this period, and some of these carriers who choose to operate illegally during Roadcheck are put-out-of-service as a result of the inspections.”

Based on how the Roadcheck impacts capacity, “the electronic logging device (ELD) mandate set for Dec. 18 this year could have sizable implications on trucking supply dynamics” if enforcement of the mandate is strict. The 3% to 4% of drivers who had violations during the inspections understate “the total impact to industry capacity as many of these smaller fleets simply chose to not haul freight during this period,” Delco said. “We view these results as a clear sign that the ELD mandate (if effectively enforced) should support acceleration in the contractual rate environment looking into 2018.”

INDUSTRY TRENDS
According to DAT Trendlines, spot rates for dry-van rose 11% in April, from the same month in 2016. Compared to March, rates rose 2.5% in April. Dry-van loads rose 128%, in April, from the same month in 2016. From March, loads rose 8.4%.

Overall, spot market loads increased 91% in April. Capacity fell 6.6%. From March, capacity fell 12%. For the week of May 21-27, capacity fell slightly as rates rose 2.3%, compared to the previous week.

“Some drivers wrapped up their work weeks early ahead of Memorial Day weekend, which led to tighter capacity near the end of the week,” according to DAT.