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6 FEDA News & Views Industry Insights You Can't Prevent Capacity Constraints But You Can Minimize the Cost Kevin Brink Director of Client Solutions ReTrans Freight kbrink@retransfreight.com C oncerns over equipment and driv- er capacity constraints have been growing for some time, making it one of the more anticipated challenges within the transportation industry. It's been on the radar for a few years but all signs point toward 2017 being the year of impact. Meaning, regardless of what the economy does or doesn't do, FEDA members should brace for the domino effect. One of the levers orchestrating change is government regulation, which is set to play a major role in impacting capac- ity and pricing this year. The prevailing example of this is the manda- tory use of Electronic Logging Devices (ELDs). The ELD mandate has been discussed and deliberated for the bet- ter part of three years and despite the Owner- Operator Independent Drivers Association's recent request for a rehearing at the U.S. Court of Appeals, it is expected that The Federal Motor Carrier Safety Administration's (FMCSA) mandate for all trucks to be equipped with ELDs by December of 2017 will stand. Currently, approximately 45 percent of trucks on the road are equipped with ELDs. ELDs electronically log and track hours behind the wheel and directly cor- respond with the FMCSA's 2016 hours of service laws, which reduced the overall hours that drivers can perform their duties over the course of a work week. What does this mean for the transpor- tation industry? The mandatory imple- mentation of ELDs will constrict capac- ity this year, as many smaller fl eets and owner operators close to retirement will likely not be capable, or willing, to absorb the cost of regulatory compli- ance. Most major LTL and truckload car- riers have already equipped their fl eets with ELDs over the years in anticipation of having to become compliant, howev- er, major LTL and truckload carriers are reliant on small fl eets and owner opera- tors to perform line-haul duties. An often forgotten fact is that LTL carriers are the largest consumer of full truckload capac- ity. Any disruption to capacity in this arena will create equipment and hours of service constraints, in addi- tion to the already estimated 48,000 driv- er shortage reported by the American Trucking Association. The driver and capac- ity shortage remains one of the central issues plaguing the industry, as both carri- ers and shippers labor to fi gure out how they will work through the challenge. While speaking on government-run initiatives, it's important to also note that over-the-road transpor- tation providers are being impacted by the lack of infrastructure investment in roads, bridges, tunnels, etc. Highway con- gestion is projected to worsen, which leads to lost productivity, additional upkeep of equipment and consumed driver hours in high-volume pickup/ delivery areas. continued on page 28 As carriers work through capacity shortages and drive network efficiency, they are taking a meticulous look at operating ratios and the ease of doing business with each shipper they service. This is where FEDA members need to protect themselves.