How CalArk leveraged tech to benefit from short-haul ELD exemption

In May 2020, the Federal Motor Carrier Safety Administration changed the hours-of-service rules that govern the workdays of the nation’s truck drivers.

“The Department of Transportation and the Trump administration listened directly to the concerns of truckers seeking rules that are safer and have more flexibility — and we have acted,” said Jim Mullen, who was the acting administrator for FMCSA at the time. “These updated hours-of-service rules are based on the thousands of comments we received from the American people. These reforms will improve safety on America’s roadways and strengthen the nation’s motor carrier industry.”

For trucking companies operating in the final mile or local delivery space, though, one change created a problem: the short-haul exemption. The exemption had existed previously, but changes under the new rule, along with the introduction of ELDs in 2017, meant more complexity for fleet managers and drivers.

One of the fleets that struggled with the new rule was CalArk International. Based in Little Rock, Arkansas, CalArk specialized in dry van truckload service for most of the years since its 1975 founding. But in 2018, the company entered the local delivery space, primarily handling dedicated freight moves from distribution centers to stores. The average local delivery driver makes 15 stops a day using a CalArk box truck, said Ray LaPrade, vice president of information technology for the company.

ELDs for all

Unable to accurately separate hours for local drivers — most of whom did not require a CDL — from those of over-the-road drivers who required CDLs and therefore had to follow HOS and ELD regulations with existing technology, CalArk decided to have everyone operate on the ELD. From there, the back office painstakingly differentiated the drivers according to their proper status. In addition to the added office work, it led to more time contesting roadside violations of drivers who were exempt but couldn’t prove their status at the time.

“There are several aspects to our program, but the missing piece had been a system to track/manage compliance that fit us,” explained Leslie Stout, director of safety for CalArk. “We didn’t want to have to add a substantial amount of work to anyone or add staff to manage a system, which is often the case when implementing new technologies.”

For fleets with only local delivery operations, the exemption rarely came into play. But for the growing number of larger fleets developing mixed operations (local and truckload OTR) and seeking shorter, more frequent hauls to address greater consumer reliance on e-commerce, the new rules presented challenges. 

Manual management

LaPrade said CalArk reached out to fellow carriers with local delivery operations to see how they handled the situation.

“The response we got was [they] really didn’t have a system for this,” he said. “What we found is people manually managing it once they qualify a driver [as exempt].”

For CalArk, the 2020 change to the short-haul exemption was potentially a big plus – if it could figure out how to manage it. The change lengthened drivers’ maximum on‑duty period from 12 to 14 hours and extended the distance limit within which the driver may operate from 100 air miles to 150 air miles. That meant that of CalArk’s 300 local drivers, more than 80% now qualified under the exemption.

“Just flip a switch and turn it on. I wish it was that easy,” LaPrade said. “What prevented the entire program from rolling out was the missing piece of a system to manage it. We knew 80%-plus of our drivers qualified for this. We generally knew how to flag them under our ELDs, but how do you track and manage them? We weren’t comfortable rolling this out without a way to track and measure it.”

The need for a way to effectively manage an exemption program for fleets like CalArk is growing as more retailers turn to ship-from-store operations to handle e-commerce orders. That means more local delivery fleet operations as retailers require more frequent store deliveries, although not always full trailers of items.

LaPrade said he spoke with several ELD providers but no one had an integrated system to manage the exempt drivers the way CalArk felt it needed to be done.

The 3 a.m. idea

“[It was] one of those 3 a.m. thoughts I had one night — the best thoughts come at 3 a.m. when you can’t sleep. I started thinking about what was required to track drivers,” he said. “I was thinking about the underlying data that would be required, the type of workforce [and staff to manage it]. I scheduled a call with a trusted software vendor and bounced the idea off them. We looked at the files and it really snowballed quickly from there, and I relayed the design of the system, how I wanted it to work. All of the data was already there; we just needed to save it in a different manner.”

That vendor was Add On Systems, which helped CalArk design a recording system that would sit on top of its Omnitracs ELD system.

“We have a system that is 100% compliant with FMCSA rules,” LaPrade said. “We have been able to roll the system out to 80%-plus drivers in the division. The strategy for our user experience was truly to manage by exception. We have screens that anyone can look at and see what they want, but anytime a driver gets anywhere close to being out of compliance, we get notified two days in advance so we can proactively adjust their duty.”

To utilize the short-haul exemption, carriers need to make a number of determinations, including whether the driver will have to log more than eight days in a 30-day period. If so, the driver might be on an ELD for much of that time, and maintaining two separate record systems could create excess work and confusion, and potential violations as a result.

LaPrade said ELDs are still used, but once the driver logs in, the system identifies that driver as a local delivery driver operating under the short-haul exemption. The ELD still tracks the vehicle and driver “to ensure those pings are associated with that driver and to be sure they are within the 150 air miles,” LaPrade said, but the software eliminates the need for more manual changes and monitoring of the driver.

Profile-based compliance

Should that driver need to move out of exempt status, office staff alter the profile of the driver as needed. Drivers themselves can’t change their status, preventing a nonexempt driver from going exempt to avoid violations.

“Once they are qualified [as exempt], they can log into the system in any truck,” LaPrade said. “A nonexempt driver can use the truck as well and the system follows them [ to record their correct status].”

The system tracks all drivers’ starting point, finishing point, the truck they are in and whether they travel more than 150 air miles from their starting location each day. From an operational standpoint, Curt Vernon, vice president of warehouse services at CalArk, said the system has provided clear benefits since it was rolled out in October.

“First and foremost, the majority of our drivers fall under short-haul exemption, and the required interactions with our in-cab devices have streamlined the required actions of the drivers, thus making it easier for them to perform their duties,” Vernon said. “An integral part of our program was providing cab cards that detail the program, and instructions on how to communicate with law enforcement to show we’re in compliance with legal guidelines. This has certainly led to fewer violations, which ultimately benefits our drivers and assists us in sustaining our premium level of service for our customers.”

Watch: Are truck drivers happy?

LaPrade said the cab cards are essentially detailed instructions for drivers on how to handle the interaction with officers, where to find the correct information to prove exempt status and how to transmit that information.

Tweaks lead to better system

CalArk introduced a second version of the system in March, hoping to address some of the issues, including false positives, that were occurring. To date, those have been alleviated and the system is working perfectly, LaPrade said.

“We now have the missing piece, which allowed our program to roll out very quickly and successfully,” Stout noted. “We’re compliant under FMCSA rules, and after the initial rollout, it really is a manage-by-exception philosophy — we’re notified when a driver is approaching noncompliance thresholds, but with enough time to proactively change the driver’s duties or migrate them to the traditional ELD. Either way, we’re compliant with every driver, regardless of the situation.”

Like most fleets, CalArk puts a premium on safety and compliance.

“We’ve prevented violations and we know the number has gone down,” LaPrade said, although he didn’t know the exact number of violations averted. “Prior to implementing the system, we were running into violations that we shouldn’t have.”

He added that as a policy, if a driver is consistently moving back and forth between exempt and nonexempt status, CalArk moves that driver to nonexempt to simplify the process and create continuity. But more than 80% of its local drivers are now spending less time managing compliance and the fleet is amassing fewer violations.

“We felt pretty good about our commitment to safety, but the system to track [status was the missing piece,” LaPrade said. 

 Click for more articles by Brian Straight.

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Source: freightwaves - How CalArk leveraged tech to benefit from short-haul ELD exemption
Editor: Brian Straight