When the FMCSA-mandated ELD compliance date in December 2017 rolled around, automatic on-board recording devices (AOBRDs) installed in vehicles prior to that date were grandfathered in as acceptable exemptions to ELD rule compliance. On December 16, 2019, however, the AOBRD exemption ends, and AOBRDs and logging software will no longer be considered acceptable stand-ins for ELD devices.
And while the sunsetting of AOBRD devices is a year away, it’s a year that will go by quickly – and just as with ELD implementations, the trucking, shipping, and logistics industries will be sure to see a large number of new ELD implementations at what amounts to the last moment.
But it doesn’t have to be that way – nor, for the sake of the fleets currently using AOBRDs, should it be. Instead, fleets with AOBRDs in operation would be wise to look not at the drop-dead date for ELD compliance, but rather at the cost benefits of switching to a comprehensive ELD and telematics solution long before the mandated December 2019 date.
The Sunk Cost Fallacy and AOBRDs
Many fleet managers and executives, to be sure, will fall prey to the sunk cost fallacy, and justify keeping their AOBRDs active as long as possible because they’re already paid for. But to do so denies two important facts, the first of which we’ve already pointed out: Come December 2019, an ELD solution will need to have been purchased and in-place regardless of any past expenditures on AOBRD.
Secondly, and more optimistically, when ELDs are part of a larger, comprehensive telematics solution, they tend to bring with them tangible ROI owing to a variety of factors. Reduced fuel costs, lower accident rates, trailer security, and enhanced cold chain management are all ROI-generating factors that need to be included in any cost calculations that are centered around switching from AOBRDs to a telematics-focused ELD solution.
The Sooner the Switch from AOBRDs, the Sooner the ROI
The cost savings from such a switch are real. Some larger fleets have seen ROI of over a million dollars annually from moving to an advanced telematics platform – but smaller fleets benefit as well at levels that are in line with their fleet size. This kind of ROI is generally attainable in a few months – and it should make a compelling case to fleet executives for switching away from their AOBRD devices as soon as possible, rather than waiting until the last possible moment. The math is simple: The sooner that telematics-centered ELD is implemented, the more months of ROI there are to be had, and that makes timeliness important for the bottom line.
But timeliness also plays another important part here: The process of switching takes a certain amount of time, and thus fleets looking to have solutions in place by the December 2019 sunset date need to build lead time into their process planning. Larger fleets will need longer lead times, but time should also be a factor for smaller fleets, as well. Existing AOBRDs will need to be removed, and appropriate ELDs installed fleet-wide, which is one of the primary time factors that will need to be accounted for.
ELD Customization and Training is Important for Proper ROI
But once the devices themselves are installed, fleets with newly-installed solutions need to budget further time if they hope to see true ROI. Driver training will be important, as will training for fleet managers on how to properly make use of the new system. A customer-focused telematics provider will also take the time needed to ensure that all of the data being collected is correct, and work with both fleet managers and executives on how to interpret that data and apply the results in meaningful ways that can truly drive ROI. This typically involves creating advanced reports that are customized (and customizable) to a fleet’s particular needs, and this is where the ROI on fuel costs and accident reduction typically come from – but again, this is something for which time should be allotted.
If all of these pieces are in place, there’s no reason for a fleet to fear either the costs or the results of moving away from their AOBRDs. Rather, moving to an event-based telematics platform with advanced reporting capabilities as a part of the switch can turn their ELD solutions from a cost center into cost savings. Moving away from AOBRDs will not only ensure compliance come December 2019, but also add a boost to fleet profitability in the meantime – so the sooner this kind of move is made, the better.
With fifteen years of operations in the fleet telematics industry, we here at CyntrX have generated millions of dollars of ROI for our customers with our event-based tracking, advanced reporting, and custom integrations. And not only do we help you reduce fuel costs and lower accident rates -- we also help ensure compliance with a variety of mandates, including ELD, fuel tax reporting, cold chain management, and much more.
If you'd like to see our ELD and other capabilities for yourself, and find out how you can turn your ELD solution from a cost center into a cost-saver, request a demo today -- and get started on the road to true ROI.