ELD Contract vs No contract

The Canadian Technical Standard for Electronic Logging Devices is supposed to tell us about how ELD’s are to function.  Of course, the 90 page technical standards document includes a hodgepodge of specifications and requirements. A key function is that these devices will be required to transfer their data.  The ability to transfer said data MUST be, but not limited to, via USB, Bluetooth, and EMAIL. ELD’s must also be equipped with Geo-Location.

Geo-Location and the ability to email data would absolutely require some sort of Network Access.  Giving rise to the old, contract vs. pay as you go debate. I will do my best to apply this debate to ELDs.

Pre-Paid / No Contract

The PROS:

Essentially one would only be paying for the service one is using.  This contest has been presented mostly in the arena of personal mobile devices.  As such the terms that fall in the “pro” category are tailored to that market.  For instance,  the idea of big savings with a pay as you go plan does not track as easily in the ELD market.  Many companies are offering a lower monthly data fee for ELDs on a contract plan.  

The most relevant “Pro” is that there would be more flexibility on the terms of service and the ability to break off service at any time.  In my opinion, this is moot.  Considering there is already a government mandate in the US and a separate government mandate coming to Canada in 2021 requiring ELDs. The ELD service is mandatory consequently it is in a companies best interest to maintain a single service plan or not jump from one to another frequently.  On the surface, there is certainly an appeal to the flexibility and control offered by a service plan without a contract. There is also something to be said about who holds more power in the transaction.  Being able to break off service at any time, consequently puts more cards in the hands of the purchaser when negotiating the terms of service.  And the larger the fleet the further the ability to bargain shifts in favour of the purchaser.

The CONS:

The drawbacks of not signing a contract or agreeing to a termed service plan should not be ignored. The most widely understood scenario is that upfront costs are substantially more.  Many services plans will roll the cost of a device or activation into the contract and stretch said cost over the term.  Purchasing an ELD can go either way.

A larger upfront cost may be easy to handle for a smaller fleet, however, a large fleet would easily identify the advantages of smaller upfront costs and spreading these costs over the term of a contract.  There is also a definite fear that a purchaser may receive sub-par network access and/or customer service.  Or at least priority access would be given to those on a contract.  

Contract Plans

The PROS:

The Benefits of a contract plan directly offsets the ideas of pre-paid or no-contract plans.  Lower upfront costs can give larger fleets significant budget advantages.  Buying into a plan and showing commitment for a predetermined time, seems to go along way in the realm of customer service.

When buying into a network commitment the goal is to guarantee priority network access.  Ensuring the network access is secure and constant when operating an ELD, is a top priority.  

The Transportation industry, in many of its forms, is notably rugged. Consequently, the durability of an ELD will be put to the test.  One big “Pro”, probably one of the most beneficial, is the option of device insurance or a maintenance care plan, that many service providers with or in addition to, a contract.  Let’s face it, ELDs are going to break.  Whether they’re dropped, cracked, bent, soaked or scratched, ELDs will always face risks in an industry that exists alongside hazards.  Peace of mind will go a long way. 

All of these benefits can be combined together in a fixed cost over the entire term of the contract, allowing companies to budget with confidence.

The CONS:

Where there are contracts there is usually some sort of compromise and service providers certainly ask for their share of these.  Of course, by signing a contract a purchaser has restrictions when it comes to cancelling or pausing service. 

Many of the “cons” surrounding a contract-based service plan directly affect the personal use industry.  Things like fewer device choices or Multiple fees/activation or data fees really don’t apply to ELDs.  

ELD requirements are straight forward, they don’t leave to much room for providers to hide behind restrictions and fees.  

Ultimately, it’s a matter of security vs freedom. ELDs are here to stay, the only choice is “do I want to ensure my compliance with the security of a contract?” or “do I want freedom and flexibility at the risk and price of no contract?” 

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