ELDs, driver shortage projected to spur M&A activity

Oct. 27, 2017
Costs associated with ELDs coupled with the expected loss in productivity is likely to spur more mergers and acquisitions in 2018.

ORLANDO. Costs associated with the need to install electronic logging devices (ELDs) coupled with the expected loss in productivity is likely to spur more mergers and acquisitions in 2018, according to executives with Marquette Transportation Finance.

The potential problem is further compounded by the time and expense required to train of truck drivers and dispatchers not yet using ELDs before the federal mandate is implemented in December.

“Smaller carriers could wind up stressed in the marketplace” and face significant earnings pressure, said Marquette CEO Rich Voreis.

Marquette provides capital loans to small and mid-sized fleets. They loans are secured by accounts receivable, which Voreis said is an alternative financing option for companies who may not qualify for a traditional bank loan.

The loans allow trucking companies to borrow only when their cash flow requires it. Marquette is a subsidiary of UMB Bank.

A shortage of truck drivers is another headache and an impediment to growth for many carriers, said DiAne Reed, Marquette’s director of national sales.

However, with expectations of double-digit rates increases for many fleets, next year could provide many of them a growth opportunity.

Reed compared the current environment with 1994, a year that saw significant consolidation within the trucking industry.

“There is a whole correction that will be happening before our eyes,” she said.  

About the Author

Neil Abt

Neil Abt is a former FleetOwner editor who wrote for the publication from 2017 to 2020. He was editorial director from 2018 to 2020.

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