May 5, 2018No Comments

ELD mandate shifts the trucking industry.

 The trucking industry shifts for the better.

Dec. 18th, 2017

eld mandate truck driver workweek log book

December 18th is now in sight! It’s no longer a distant date in the future that we can put off thinking about. The ELD mandate has brought a lot of anxiety to truckers around the country and understandably so. Electronic logs are here! It is a big deal and it is happening.

Companies big and small brace for the December deadline, dreading over the expected loss of productivity and decreased bottom lines. There is a number of challenges, that company will face, with the switch to electronic logs. Equipment costs, driver and dispatcher training as well as problems surrounding the meeting and managing customer expectations.

Many fleets are scrambling to make and implement these changes while others are still holding out in hopes for the last moment miracle. Lots of truckers we spoke to are planning to play it by ear. They intend to stay on paper logs until the very last moment and then lay low over the holidays to see how things go next year.

There is a myriad of articles in print and online detailing the regulations and how to stay compliant. We will not be discussing these here. Logiflex has been utilizing the latest in ELD technology for the past 5 years and we would like to use our expertise to shed light on an issue that is widely overlooked.

Electronic logs are good. They are good for drivers, good for companies, and overall good for the entire industry.

Nothing about the ELD mandate changes the current hours of service regulations. It simply ensures that motor carriers and individual drivers stay compliant and do not cheat. It really is that simple. If you are raising hell about the DOT taking away your livelihood, you are in reality simply being upset you will no longer be allowed to cheat.

Putting an end to paper logs does not hinder drivers from earning good paychecks. It does however prevent unscrupulous employers from exploiting drivers and coercing them to drive beyond the regulated hours of service. Forcing truckers to drive around the clock in order to make up for the “bad rates” imposed by “unfair” freight brokers and customers will come to an end. In recent years, numerous companies have ”taught” their drivers they need to drive more in order to earn a decent living. Well, here’s a question — why not drive less and get paid more per mile?

This is where the ELD Mandate levels the playing field.

Drivers will no longer be exploited and expected to deliver freight in record times with minimal or no sleep. When faced with the reality of enforced hours of service regulations, shippers and brokers will naturally adjust rates to address the issue of truckers refusing their freight.

Free markets adjust themselves based on the levels of supply and demand. Trucking companies will no longer accept low paying freight, as they will find it increasingly harder to fill the revenue gap simply by making it up in volume. More miles will now equal increased overhead in terms of additional equipment and manpower. Rates will have to go up and they will because freight needs to keep moving. Freight brokers and shippers will pay higher rates or they will not move their freight. Even bottom feeder carriers will be unable to provide transportation at rates below cost.

Higher revenues will create the opportunity for motor carriers to increase driver salaries and thus make up the difference in pay they would otherwise experience under “shortened” hours. In essence, drivers will greatly benefit from the mandate. They will earn more and drive less.

But will my pay change?

Critics will undoubtedly offer that employers will not necessarily provide pay increases for their drivers and possibly pocket the extra cash, but those same basic economic principles of supply and demand will be in full play here as well. Drivers will simply leave companies unable or unwilling to offer competitive pay.

When it comes to motor carriers, the benefit of increased rates goes without explanation. There are however further benefits to consider. Decreased rates of equipment amortization will result in considerable fleet savings. Companies will also enjoy lower insurance premiums to reflect increased driver safety scores. Automated and electronically recorded geo-tagged timestamps will prevent detention and layover arguments and expedite loading and unloading times.

Driver performance will be easily calculated, compared, and quantified. Seasoned drivers will enjoy better pay and job security, as quality will finally take precedent over quantity.

The trucking industry will indeed change on December 18th. It will be safer, smarter and a better place to work.

America is making trucking great again!

May 4, 2018No Comments

Different truck insurance explained

4 types of insurance associated with owning an eighteen-wheeler

Owner operators are asking us to have truck insurance explained and what are the charges.

 We found out that many owner operators who want to lease with us, don’t know how different types of insurance coverage work. There are four main types of insurance that trucking companies and owner operators should be familiar with.

Liability Insurance

This is the most important from a legal standpoint. Without it, a trucking company cannot legally haul freight on public highways, making the company MC (motor carrier number) unusable.

As the name implies this type of insurance covers liability in a potential accident. When drivers with bad records apply for work, it is this type of insurance that prohibits the company from hiring them. From their standpoint, putting unsafe drivers in the truck is too big of a liability and the risk of potential accidents with such drivers is too high. Once denied coverage it is illegal to put these unapproved drivers behind the wheel.

Liability insurance covers only the accidents that happen under dispatch. These are during the normal work of the truck. Auto-liability insurance does not cover little personal trips.

The price varies among carriers, but for the most part starts at $500 per month and goes up, depending on the safety profile of the company. We, at Logiflex, implemented eLogs 2 years ago, which resulted in a significant revenue cut (you know paper logs are more “elastic”), but our safety scores improved dramatically and our claims decreased. I will get into more detail about the pros and cons of eLogs in a future post.

In a nutshell, when it comes to liability insurance, the safer the company the lower the premium.

Physical Damage

Covers the damages on the insured equipment. If we have an example with an insured bobtail and uninsured trailer. In a potential accident, the insurance company will pay for the first without covering the second.

The formula, calculated as a percentage of the value for which the equipment is insured, is as follows: truck value x (policy percentage) / 12 = monthly physical damage payment. If we put in some numbers it would look like this: truck valued for $50,000 with insurance rate of 3%, in the formula, we get 50,000 x 0.03 / 12 = $125 monthly payment. Sometimes the driver can bargain a lower percentage. There are plans where you pay 25% upfront and the rest of the amount splits into 9 equal payments. Not paying anything in the last three months.

Some drivers are tempted to insure their equipment for a price higher than the actual value, so in case of a total loss accident, they get more money than the truck is worth. Don’t do that!!! Insurance companies would only pay for the market value of the equipment. (You know when something happens with the batteries and the truck burns down). On the other hand, if the value of the truck on the policy is below market value, the insurance company will only use the reported value amount instead of the actual market value amount.

Cargo Coverage 

As the name implies, this type of insurance covers the cargo that is transported in the trailer. It is usually very cheap — about $50–100 a month. If you are an owner-operator who leases to Chicagoland carrier, most likely you know $700-900 “cargo” insurance per month(or $170 or so per week).

The lingo name of this truck is "bobtail". If it hits one of the surrounding cars, the claim will go under Bobtail Liability policies. The dispatcher did not authorize the driver to take it to that parking lot.

Bobtail Liability

When owner-operators purchase physical damage insurance, they are also asked to add bobtail liability coverage. It usually costs just a few dollars per month. It covers potential accidents when the driver is using the truck as a personal vehicle. An example would be  driving bobtail to and from the movie theater, buying groceries, etc.

Many trucking companies would require owner-operators to show proof of such coverage before leasing with them. This way carriers protect their liability policy from potential claims that would happen during non-dispatched driving.

There you have it - truck insurance explained. For all documents that need to be in your truck folder read here.

© 2018 Logiflex Inc

Blog / Owner Operators

ELD mandate shifts the trucking industry.

 The trucking industry shifts for the better. Dec. 18th, 2017 December 18th is now in sight! It’s no longer a distant date in the...

→ Read More

Different truck insurance explained

4 types of insurance associated with owning an eighteen-wheeler Owner operators are asking us to have truck insurance explained and what are the charges....

→ Read More