The trucking industry is fond of the saying “When the trucks stop, so does America” and unfortunately that tidbit of trucker insight happens to be true.
Those who have shipped anything on a pallet in the last fifteen years are undoubtedly aware of the incipient driver shortage affecting the North American freight industry.
The American Trucking Association estimates that at any one time in the United States there are, on average, 3.5 million interstate truck drivers on the road.
That is a woefully inadequate number of truckers to accommodate the nearly eleven billion tonnes of freight that is shipped annually.
Why Does America Have a Driver Shortage?
To tackle a pervasive issue, however, one must first understand it. So why do we have a driver shortage in this country? It’s simple really, American truckers are getting older and the job sucks.
The Bureau of Labor Statistics estimates that the average age of a commercial truck driver in the U.S. is 55 years old.
America’s interstate truck drivers are retiring, and the younger generations have very little enthusiasm or incentive to undertake a relatively low paying career, which The Bureau of Labor Statistics estimates the median average salary to be little more than $40,000 per year.
Furthermore, the job almost always comes with added health risks including diabetes, obesity, back pain, sleep apnea, and a litany of other debilitating health issues.
Not to mention the obvious amount of time an interstate truck driver spends on the job, away from their homes and their families.
The Stats Behind The Driver Shortage
The ATA’s 2017 driver shortage report states that by the end of 2016 the trucking industry was short roughly 36,500 drivers, which was an improvement from 45,000 in 2015.
However, the shortage was expected to surpass 50,000 by the end of 2017, which it did indeed. If current trends are maintained the shortage has the potential to swell to a need of over 174,000 new drivers to meet demand by 2026, and the issue is only getting worse.
Supply and demand dominate the transportation industry, and the driver shortage is no different. The driver shortage has put the industries “supply” firmly in the hands of the carriers as the need to ship America’s freight, not to mention the sheer amount of it, has only grown.
DAT Solutions, a firm that collects and analyzes transportation data, has stated the national average for spot market loads in January of 2018 was higher than it was during the 2017 peak season when rates skyrocket due to an influx of freight to the market.
It goes on to state that the 2018 truck to load ratio is the lowest it has been since before the recession in 2005, at a whopping 12 Loads per truck on the road.
In layman’s terms, this means every trucker on the road has an average of at least twelve loads to choose from when deciding which freight they want to haul. Of those loads, only the most attractive, well-paying freight tenders will be accepted.
So what does this mean for you, the shipper? It means you better adapt because the driver shortage isn’t going away and the futuristic driverless trucks of the future are still a long way off.
Luckily there are a number of industry best practices, tools and trends that will make your freight more attractive to the small number of carriers that remain, and open up new and innovative ways of shipping freight from A to B.
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Freight brokers are often tagged with a bad reputation in the shipping industry. For many shippers, the term alone is enough to garner a scoff, but in actuality, brokers can be a considerable asset to shippers, especially when capacity is tight.
Brokers work with a much larger carrier base than most shippers have contracted to their routing guide, and as such, can secure carriers whom the shipper might not realize are interested in or have the ability to, service their freight.
It should be noted, however, that shippers utilizing more than one broker to cover the same load/s is proactively shooting themselves in the foot.
Brokers, with few exceptions, are generally calling on the same carrier base within the shippers market, and there are only so many trucks on the road and in any particular market at any given time. Hiring more than one broker only increases demand for that carrier in that market and, in doing so, increases the rate at which that carrier can be secured.
Use Load Boards
Loads boards are used by shippers to post their freight to be “reverse-bid” on by carriers who are in the shippers market area. Carriers utilize these load boards to find, bid on and secure freight that falls into their network, or more likely, will return their driver to said network, in what is referred to in the industry as a backhaul.
To many shippers, It may seem counterproductive and expensive to post their freight on a load board, but proper utilization of this valuable freight shipping tool can often return much-needed carrier capacity in a very short amount of time.
Utilize Mode Conversions
There is more than one way to ship a cat.
Flexibility and the ability to quickly adapt to the ever-changing freight markets is critical for any successful shipper.
A high load-to-truck ratio can be a significant detriment to shippers who limit themselves to only one mode of ship when in actuality there are a number of different ways in which shippers can move their freight that bypass or nearly bypass the driver shortage altogether.
Break that ship up.
For shippers who are having trouble covering their freight and have some time to spare until the product needs to be delivered should consider utilizing LTL, or Less Than Truckload carriers.
LTL typically caps out at 10 pallets or 17,000 pounds and works on a set sailing schedule depending on where the load is delivering, and from which market it will ship.
A standard example of an LTL sailing schedule is Thursday ship for Tuesday delivery. Sailing schedules and lane rates vary per LTL carrier, so shippers are advised to reach out to the LTL carrier before arranging their freight to determine the exact schedule and transit time they and their customer will need to account for.
It should be noted that LTL carriers do not pick up or deliver on the weekends.
For the rate conscious shipper, intermodal shipping should be their first choice of getting freight from A to B. Rail shipping is the industries safest and most cost-effective way of shipping freight across the continent.
Transit time for intermodal is, on average, twice as long as standard over the road shipping, but this fact is often offset by the modes relative inexpensiveness and influx of containers.
The intermodal process does not eliminate the need for a truck, however, as a dray carrier is still needed to haul the empty container from the railyard to the shipper and from the shipper back to the rail yard, and again to haul the container from the delivery railyard to the final customer.
However, the dray carrier is more times than not, secured by the intermodal service provider and not the responsibility of the shipper.
Maintain Carrier Negotiations and Relationships
It should go without saying that the number one way to secure valuable capacity during the driver shortage is to build mutually beneficial relationships with your carrier base.
Carriers are negatively affected by the driver shortage too. The carriers, like shippers, are always in search of an inexpensive, more efficient ways of shipping freight with fewer and fewer drivers than ever before.
This means that a lane that fits the carrier’s network, meaning it returns their equipment and their drivers to their home market, is a valuable commodity and will be bid on more aggressively to secure it.
A smart shipper works with their carrier base to uncover those precious “backhaul” lanes and adjusts ship and delivery dates to align that lane with when the carrier can service it.
Questions to ask your carrier base would be; “When can you cover this load next?” “Where do you need to get your driver?” “What other equipment do you have available?”
Consider Freight Desirability
Smart shippers make it easy to haul their freight. The harder it is for a carrier to load at a shipper, the less likely that carrier is to accept another load from that facility.
Cutting Dwell Times & Cost: Understanding the Interstate Truck Drivers Hours of Service address’ this very topic and is an invaluable read for shippers looking to improve their loading process and make their freight more attractive to carriers.
There are a lot of optimistic transportation industry analysts who believe the advent of the “driverless trucks” championed by moguls like Elon Musk, will be the solution to the driver shortage and the holy grail of the trucking industry.
More practical analysts will advise that driverless trucks are a long way from implementation, which means a pragmatic approach is needed to survive the capacity crunch without emptying the coffers.
Shippers who follow the approach laid out in this post will secure valuable carrier capacity, build stronger carrier relationships and deliver a load of success rather than a load of bankruptcy.