Drop in E-Logging Device Prices Lowers Mandate’s Projected Cost

This story appears in the Sept. 2 print edition of Transport Topics.

Electronic logging device makers said the federal government’s plan to require almost all truckers to use the devices will cost the industry far less than the $2.4 billion the government estimated in 2011.

Company representatives said the availability of more ELDs — including some that require no upfront expenditures — means the price tag for fleets to comply has fallen markedly.

“The cost of hardware has come down tremendously,” said Amy Krouse, spokeswoman for Rand McNally, based in Skokie, Ill. “A lot of the newer devices are self-installed . . . . Nearly every aspect of the proposition has come down pretty substantially.”

The bulk of the projected cost of the Federal Motor Carrier Safety Administration’s April 2011 mandate came from the $1.9 billion estimate to equip the entire trucking and bus industries with ELDs, also known as electronic onboard recorders.

The proposal was one of the seven most expensive regulations the federal government was considering as of August 2011, President Obama said in a letter to House Speaker John Boehner (R-Ohio).

FMCSA withdrew its 2011 proposal after a previous regulation that would have mandated the devices for carriers with the worst hours-of-service violations was thrown out by a federal court because it ruled the agency did not consider the potential for driver harassment through the use of the devices.

Both the limited mandate for poor performing carriers and the wider proposal for virtually all carriers used the same standards for the logging devices, so the court ruling applied to them both.

The agency expects to unveil a new proposal in November. After that, FMCSA said it plans to review comments on the proposal for at least a year before making the mandate final, and then give the industry two years to comply, putting the effective date in late 2016, at the earliest.

Because the proposal is still being developed, FMCSA spokesman Duane DeBruyne said he was unable to comment on the potentially lower price tag.

However, in July, the agency posted a comment about the rule on its website, saying the cost estimate could fall.

“The agency believes the market has changed since 2011, with new vendors entering the market responding to the demand for electronic logging devices with fewer fleet management features,” it said.

FMCSA cited as an example Qualcomm’s MCP50 device. When unveiled in April 2012, the unit sold for $899, much lower than the $2,000 FMCSA had estimated a year earlier.

Qualcomm recently announced it would sell its trucking technology subsidiary, Omnitracs Inc.

Since early 2011, the ELD market has dramatically changed, said Nick Reed, general manager at uDrove, which started selling ELDs last year.

There are more basic options available, rather than fleet management devices that offer routing, dispatch, fuel optimization and other features, in addition to logging.

“We’re seeing more competitive pricing as more companies pop up,” he said.

The uDrove system, a logging device that a driver connects to a smart phone or tablet, sells for about $300, Reed said.

Rand McNally began integrating ELDs into truck navigation devices last year. It sells a $649 device, and Krouse said it soon will start selling a device for about $300 that can log hours if paired with a navigation device, smart phone or tablet.

Manufacturers are trying to help fleets “who have already invested in technology leverage the technology they’ve already spent” money for, she said.

XRS Corp. said it offers a device that uses a phone or tablet as an ELD at a cost of $39 a month.

“As the market continues to evolve, and the mandate comes down, there will be continuous price pressure,” said Christian Schenk, XRS’s senior vice president of product strategy.

Schenk predicted that FMCSA’s cost estimate will be much lower than it was.

“There are a number of different factors that say the price is going to be significantly reduced, just based on what’s happened since 2011,” he said.

VDO RoadLog told FMCSA in 2011 that the $2,000 estimate was high, said Alexis Capelle, manager of the company’s telematics products.

“Those costs may have been right at the time they were written, but it was not actually a projection of what would happen when the mandate comes,” he said.

The RoadLog is available for $500, Capelle said, “much lower than FMCSA was contemplating.”

Still, some companies that offer the more feature-packed devices see no need to change their offerings to appeal to the same crowd that their cheaper competitors are selling to.

“We’re not really a great fit for the guy who just wants a simple EOBR,” said Brian McLaughlin, president of PeopleNet. Nonetheless, PeopleNet now lets companies pay $50 in monthly fees to use their devices instead of buying them, he said.

“The more sophisticated fleets who want a lot more than the EOBR will focus on traditional solutions like Cadec,” said Pete Allen, CEO of Cadec Global Inc.