As the Canadian ELD mandate draws close to its implementation date of June 12th, 2021. The commercial trucking industry has been preparing for widespread adoption. That’s why it’s important to understand the costs associated with adopting electronic logging devices.
According to The Government of Canada, operation expenses (indirect expenses) are responsible for ~65% of total revenues, with a net profit of 14% of revenues. These are relatively slim margins to operate on. Especially if you own or manage a large fleet with hundreds of trucks and drivers.
The use of ELDs has multiple costs associated with it. Although it’s possible these new (ELD) costs will eat into profits, that is not necessarily the case. Both Transport Canada (TC) and the Federal Motor Carrier Safety Administration (FMCSA) claim that the financial benefits from the adoption of ELDs will not only offset the additional costs but will ultimately save firms even more money due to the efficiency benefits of ELDs. Improving the overall profit margins for most fleets and the industry as a whole.
ELD Costs
Not all ELDs are created equal. There are many ways in which ELDs can differ from one another. From the actual ELD product, to the service you receive from the provider, and the pricing model. Understanding these differences is key to adopting ELDs in your fleet.
Many ELD providers, especially the larger ones, offer a “low-cost” option that is anything but. Typically these providers will advertise low monthly pricing options. However, what many fleet managers soon discover is that there are many hidden costs associated with these perceived “affordable” options.
Contracts
The most notable and apparent cost is mandatory long-term contracts. The most popular term is 3-years, where the costs associated with devices and service are amortized over the course of those 3 years. The downside is that the service (both on purchase and subsequently) provided by these large corporations is severely lacking. This is because your fleet is now locked into a long-term contract, there is no incentive to maintain your loyalty as a customer. Nor is there any incentive to help your fleet install and implement ELDs, as your monthly fees are guaranteed. Additionally, under these models, the advertising price is often deceptive. Although the monthly fees are lower and more attractive, the mandatory 3-year contract means that you end up paying more per device than you would under a shorter-term contract (or no contract at all).
One-Size-Fits All
The reason why these large providers are able to produce low-cost ELDs is that they operate under a “one-size fits all” model. Designing their ELD’s to fit in the most standard commercial motor vehicle (CMV) configurations. But not all fleets or CMVs are the same. Many trucks require custom solutions and custom integrations with existing tools and software. On the administrative side of things, many fleets require different billing procedures than those provided by large-corporate ELD suppliers. For Canadian fleets, this is particularly important. As all of these large ELD suppliers are based in the U.S., meaning they bill in U.S. dollars. This means that Canadian fleets must account for the variations in the exchange rate between the U.S. and Canadian dollar. Increasing operating costs and adding a level of uncertainty to the fleet operations.
Features
Another way that large ELD providers cut costs, is by reducing the amount of features available to the fleet manager or driver. For instance, many features (such as idling reports, MPG measurements, engine fault codes, workflows, and others) that are standard in most ELDs are left out of these affordable options. However, due to the differences in the US and ELD mandates, Canadian fleet managers do not have the luxury of forgoing features. As the cost of not being 100% compliant with the ELD mandate could be more impactful than the savings a cheaper ELD provides.
Device Costs
The final way that ELD providers cut costs is by developing or whitelisting an ELD software that uses the personal device of the driver (in the form of an app that relays to a hardwired device in the truck’s engine). The data received by the in-engine module is transmitted to the driver’s smart device, thus bypassing the need for a dedicated ELD device and reducing upfront costs. This means that the divers’ phone must be compatible with the chosen ELD app. And if you own a smartphone, you know that app compatibility from device to device (and operating system to operating system) can be unreliable. Opening up the possibility for the driver or fleet manager to be in a situation where they need to purchase a new (and compatible) smart-device to properly use the app. Thus increasing costs significantly (smartphones and tablets aren’t cheap).
The final thing to consider is that these ELD solutions require that the user’s phone be “on” and the app be active. Draining data, battery and severely reducing the life of the phone. This would require the driver to replace their smartphone significantly more often, increasing the cost for the fleet manager or driver. That’s not even factoring in the extra data costs. And in Canada those data costs are considerable when compared to American counterparts.
Guardian ELOG
The Guardian Elog was designed by our in-house team of engineers to be the perfect custom ELD solution. Balancing affordability with functionality, along with transparency. Providing reliable, affordable, and easy-to-use ELD solutions. Our pricing model is “what you see is what you get” or as we like to call it, “all-in-one pricing”. There’s no hidden activation, registration or administrative fees. Additionally, we bill in Canadian Dollars, so our fleets won’t have to play the exchange-rate guessing game.
And to make things even more affordable for our Canadian fleet managers. We are offering an optional 3 year extended warranty. At the end of your warranty term, you will have the option to purchase additional devices at a reduced rate.
We are a Canadian company serving Canadian fleets of any size. Ensure your fleet’s compliance and get in touch today.
