Electronic Logging Devices and the Impact on the Household Goods Moving Industry

Beginning in December of 2017, all drivers with applicable tractors had to install and operate Electronic Logging Devices (ELDs). These devices replace the outdated and cumbersome log-book that drivers had been using for several years.

The ELD offers many benefits for both drivers and their respective carriers

Benefits of Electronic Logging Devices

  • Limits the hours a driver can be behind the wheel, which should reduce the number of Tractor Trailer accidents.
  • The device does all of the work and drivers no longer need to keep a log.
  • The Federal Motor Carrier Safety Administration (FMCSA) will be able to track and report on driver trends and statistics with greater accuracy.

However, despite the many benefits that ELDs provide, there are several disadvantages which have negative impacts on the household goods moving industry.

Disadvantages of Electronic Logging Devices

  • Drivers may not drive/work for more than 11 hours in a 24 hour period. There is also mandatory rest time per week. These new restrictions will lengthen the time it takes for the driver to make it to destination, which may increase other costs such as per diems, corporate housing, and rental cars.
  • ELDs start tracking with the pre-trip inspection, which had not typically been included in log books. This will reduce the length of time a driver will be on the road.
  • When the ELD notifies the driver that they are done for the day, they must stop immediately or be subject to fines from not just FMCSA, but also their own van lines.
  • Routes with heavy motor vehicle traffic will be greatly impacted because ELDs measure total time on the road whether the driver is moving or at a stand-still on the freeway. Traffic jams will cause drivers to time out faster.

What should employers with relocating employees expect with ELDs?

Employers who have plans relocate employees should prepare for longer times related to their relocating employee’s household goods move. This may impact employee starting times at their new location, as well as lead to higher costs for the relocation.

What else should employers be aware of?

Driver and Labor Shortage: An additional challenge facing the Household Goods Moving Industry is the driver and labor shortage. Over 40% of drivers are over 50 years old, and are aging out of the business at a very high rate due to the physical demands of the job. The industry has been facing this problem for the past 10 years, and attracting more talent continues to be challenging. According to the American Transportation Research Institute (ATRI), only 4.4% of drivers are in the 20-24 year age range. This could impact the availability of drivers to move household goods for relocating employees, possibly lengthening the time needed to reach the final destination and delay positon start times.

Tax Rule Impact: Also, employers should be aware of the tax rule change impact on moving costs. Employers who choose to gross up moving costs for relocating employees will face higher costs as this benefit is now taxable. IRS Code Section 217 no longer creates a tax payer deduction for the Qualified Moving Expenses of household goods moving costs and final move expenses. These formerly non-taxable employee reimbursements and payments to third party vendors are now taxable income to the employee. If employers choose not to gross up, then going forward these expenses should be treated just like other taxable relocation expenses – reported as earnings to the employees, subject to income and payroll taxes, and reported on their annual W-2 as wages.

What should employers do?

Employers should review their hiring and relocation plans and timelines to account for possible delays related to any household goods moving processes, and the cost impact of the tax rule change eliminating the tax payer deduction for Qualified Moving Expenses.

Conclusion

Global Mobility Solutions’ team of global relocation experts have helped thousands of our clients with household goods moves and everything a relocating employee and their family need during the process. We can help your company understand how to plan for the impact of ELDs as it relates to your relocation program, and the cost impact of tax rule changes. Contact our experts online or give us a call at 800.617.1904 or 480.922.0700 today.

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