Time out

illustration: Matthew laznicka

The Federal Electronic Logging Device (ELD) rule mandated by Congress several years ago, and going into full effect this year, is intended to help create a safer work environment for truck drivers. It also is designed to make it easier and faster to accurately track, manage and share a trucker’s record of duty status, known as RODS. An ELD installed in the truck automatically records driving time for a more accurate hours-of-service log. The first phase, begun in early 2016, focused on awareness and transition, and the compliance phase was set to begin in December of 2017.

While any law aimed at enhancing driver safety is praise-worthy, the new regulation has caused concern among trucking companies, drivers, and numerous industries that rely on haulers to move their goods—including the horticulture industry. It also comes at a time when trucking companies are struggling with a lack of qualified drivers.

Federal regulations governing how long drivers may be actively behind the wheel of their trucks states that truckers cannot work more than 14 hours in a 24-hour period, and cannot drive more than 11 hours in a 24-hour period, without taking a 10-hour break. “Work” means the same as “on duty.” As soon as truckers start a pre-trip, they are on duty, and thus have 14 hours to be “on duty” from that moment on, before they are required to shut down for a 10-hour break. If drivers hit 11 hours of driving, they can still be doing work-related duties, as long as they are not driving. But once drivers hit the 14-hour mark, they must be totally shut down and begin their 10-hour break.

“The biggest problem with these new regulations is the confusion surrounding what industries qualify for the agricultural exemption that was put in place,” says Talmadge Coley, director of government affairs for AmericanHort. “This exemption allows the ELD requirement to be waived for transportation of agricultural commodities within a 150-mile radius of the farm where they were produced.”

However, guidance provided by the Federal Motor Carrier Safety Administration (FMCSA) on the exemption and who qualifies has been vague and problematic, he adds. Industries that have been included in the past and considered agriculture are now suddenly not included, and it’s unclear if horticulture products will be exempt.

Breaking down the rules

Stephen Martin is logistics account executive for Total Quality Logistics, which operates a fleet of 80,000 carriers, hauling goods and products from Canada to Mexico and everywhere in between. The company has nursery customers based in North Carolina and California, and delivers their products coast to coast, including to Canada.

“Obviously, the single biggest impact of the new regulations involves the HOS, or hours of service, rules and enforcement,” says Martin. “While there is not a large change from the actual rules themselves, the implementation of mandatory ELDs, electronic logging devices, mean that on-duty time is recorded.”

He says the standard operating hours for a driver are three hours of loading/unloading time and 11 hours of drive time with a 30-minute mandatory break included. A driver can be "on duty" for a maximum of 14 hours per day.

“But I don’t believe the carriers moving flowers, shrubs, trees, etc., should be exempt from the regulations,” he says.

“To put it in perspective of carriers, let's look at carrier sizes,” Martin says. “The first people that will see increase in their pay rates are smaller owner-operators and small fleets. They will be able to instantly command higher prices to haul loads due to the increase in down time. The next people that will see higher rates are mid-size carriers with a large amount of leased drivers that have a few contracted rates with customers, but still rely on the spot market to complete capacity. Their leased drivers, who own their trucks, will leave the safety of a larger company knowing the spot market will pay more.”

He also speculates that the biggest carriers that rely mainly on contracted rates with large companies, i.e. Wal-Mart, Amazon, Tyson Foods, will try to hold contracted rates for as long as possible, but ultimately will have to either break contracts or increase their rates mid-term.

“Long story short, the spot market is poised to see a large increase in rates. It's not yet known how high they will increase, but an increase is inevitable across the board, affecting small and large growers alike. Obviously, larger nurseries with deeper pockets may be able to offset the increase in freight spending by passing the increases on to their customers.”

Horticulture questions

To muddy the waters even more, Brent Vander Pol, president of Peninsula Truck Lines, which ships throughout the West Coast and beyond, says whether or not the new regulations will affect the horticulture industry will depend on the situation and product being moved.

AmericanHort has been in regular contact with Congress, officials from FMCSA at the Department of Transportation, and the Department of Agriculture concerning the implementation of the new regulations and their impact. Coley cites a worst-case scenario.

“It’s growers having their trucks pulled over, thinking they fall under the exemption, and then enforcement officials stating that they don’t. Trucks are then pulled off the road, potentially losing or damaging plants with little recourse for the business owner.”

Peter Scarff, owner of Scarff's Nursery in New Carlisle, Ohio, says the new regulations will probably have a greater impact on larger growers that utilize their own fleets, but that the impact on smaller growers can’t be understated.

“We’re headed into a lull season when it comes to shipping, which should allow our industry to get up to speed and get into compliance,” Scarff says.

Andy Harding, vice president/general manager of Herman Losely and Son in Perry, Ohio, is less optimistic.

“The problems for the nursery industry because of this new legislation will be many, but the main ones will be a large increase in the cost of shipping. Long journeys, such as from Oregon to the Midwest or East Coast, will take one or two days longer unless the truckers run team drivers,” Harding says. “I do not think this new legislation will affect small growers any more than large growers unless they have to put together multi-drop loads, which could take much longer to get unloaded. When this legislation goes into effect, there will probably be a bigger shortage of trucks than there is now because truckers will not want to deal with the new regulations. Growers in out-of-the-way locations will be the worst hit. There will undoubtedly be a significant increase in shipping costs, possibly 25 percent or more.”

He views the new ELD rule as “just more regulation” that will make it more difficult to get product to the customer on a timely basis, “and means higher costs.”

Alan Weiss, president of Papio Valley Nursery in Papillion, Neb., is preparing for the change.

“We currently have one truck in our fleet that makes local deliveries. I have been waiting until the nursery shuts down for winter season to work on what needs to be done to bring us up to compliance. I understand we will have an initial expense in getting the module installed. Beyond that, I don't have a lot of worries about how new regulations will affect us,” says Weiss.

Weiss sees a potential issue with suppliers from which nurseries bring materials.

“It seems like there has been a shortage of drivers and trucks, and I feel that these new regulations will push those problems to an entirely new level.”

He sees delivery prices going up and shipping time taking longer.

“That can be a hard one to sell to customers that are waiting for stock.”

Small growers with their own trucking unit will be “mildly” impacted,” adds Weiss.

“Those who don't have their own trucking will see shortages in trucks. This would affect larger growers to a greater degree. I am sure larger growers will contract with trucking companies to have trucks available, so maybe there is an advantage to being larger, where a grower has the financial advantage to secure contracts with shipping companies that a smaller grower cannot promise,” Weiss says.

Weiss recalls some real trucking challenges in the fall of 2017 because of natural disasters in Texas and Florida that had trucks tied up when moving freight.

“At the time, we were trying to ship out of Oregon and the price went sky high and there were not any trucks available. I think areas that produce high volumes of plant material like Oregon or Florida will really see the challenges of a lack of trucking,” he adds.

Widespread changes

Jason Moore, vice president of We Find Plants in Rochester, N.Y., brokers that sell primarily to mid- and large-sized jobs, says the new regulations affect every aspect of the supply chain.

“If you bought it, a truck brought it,” he quips. “If your supplier buys something, a truck brings it as well. Anything being shipped to them could potentially go up in price. For example, growers ship in plastic containers, burlap, twine, metal baskets, pesticides, hoses and lots of other things on a yearly basis. If those costs go up, they will likely have to pass it on to their customers.”

He observes that growers can only load a certain amount of trucks at a certain rate. This means if a truck shows up to a grower and there are six trucks ahead of them, some will have to wait.

“There will be a lot of finagling, shutting the engine off, parking, etc. to make sure that waiting time doesn’t count against their hours.”

Moore says rewholesalers or landscapers getting full loads from far away will definitely have price increases and longer delivery times. This can be a problem with anything perishable.

“Trees and shrubs can dry out if on a truck for too long,” Moore says. “If they are in leaf and the weather is warmer, the leaves can easily get wind-burned. There really isn’t a way to water plants once they leave the nurseries. Some trucking companies have tandem drivers or two drivers, so when one’s hours run out, the other can step in and keep the load going. But, paying two drivers will definitely cost more money.”

Moore has talked with drivers about the new regulations and they have expressed concerns.

“A lot of drivers are worried because, for the most part, deliveries need to be made Monday through Friday. Some places take Saturday and Sunday deliveries, but not as many. Drivers make their money on a load-by-load basis. When they unload their current load, they are off to the closest thing they can find to get them reloaded,” Moore says. “They like to link these together in a way that brings them closest to home for the weekend. With these hours and mandatory breaks, they are easily going to lose a day or even two days in the week to deliver. That’s for sure going to cut into their income.”

Trucks schedule “slots” or appointments to pick up material. If drivers get held up from traffic or from the load before, they could easily lose their slot and cause further delays.

Larger growers tend to have a broader reach shipping-wise, whereas smaller growers sell closer to home, says Moore.

“The larger growers will certainly cost more money to their farther away customers and perhaps those customers will look for other or closer options to save money. There is a significant tree shortage, however, and customers may have to bite the bullet and stick with them.”

An issue for landscapers is that they are awarded a job at a fixed dollar amount quite some time before actual delivery, so it’s often impossible for them to pass on unforeseen costs to their customers.

“With the demand for material being so high, I don’t see nurseries eating that cost when they can easily sell material to another customer,” adds Moore.

A driver who’s reached the time limit but still has a load of plants to offload could be a costly problem.

“On a 90-degree day, you have a load of trees on a truck. The truck runs into traffic problems on a highway like I-95 for example, and then runs out of hours and has to pull into a rest stop in the middle of the day when the sun is baking on a dark colored nursery tarp — usually double-tarped if the leaves are out on top of that,” explains Moore. “The delivery shows up with, say, $15,000 worth of trees and they are all rejected because the leaves are severely wilted, balls are bone dry and the customer has legitimate concerns about their survival. In addition to that, you have a strained relationship with your customer and they desperately need those trees replaced to complete the job, which most likely aren’t available or can’t be dug. Trees are usually dug beforehand while they are dormant, and survivability decreases almost 80 percent if dug in-leaf without lots of extra additives and day-to-day care after planting.”

Coley says AmericanHort is continuing to lobby for the horticulture industry pertaining to the new regulations.

“We have alerted them to the compliance dates that were and are coming up as well as stipulations of potential exemptions. We are waiting for guidance from the Department of Transportation with regard to what industries fall under the agricultural exemption. AmericanHort will continue the effort for our growers and crops to be properly recognized as agriculture. FMCSA has stated that they will provide additional guidance.”

As with any new federal law, it seems that only time will tell how much significance the ELD rule will have on growers and nurseries, both large and small.

John Torsiello is a Torrington, Conn.-based writer.