RFX Blog

Regarding the Motor Carrier Capacity Crisis

November 27th, 2014

Photo Credit: "m01229" | Flickr Creative Commons

Photo Credit: “m01229” | Flickr Creative Commons

We are now a few weeks removed from the National Association of Small Trucking Companies (NASTC) conference in Nashville, TN, but we wanted to share some insightful information taken away from the event.  Our good friend Jimmy DeMatteis of Des Moines Truck Brokers wrote a great article that was inserted into the attendee program material. Jimmy speaks about the driver shortage and capacity crisis and what he thinks aught to be done.  Jimmy had some great ideas and with his permission, we’d like to share this with you:

The article outlined a few key points:

–  All members of the supply chain need to create an environment in which drivers feel welcomed and appreciated.

–  Much more emphasis must be placed on our expectations of drivers and their rewards for a job well done. Loading and unloading delay issues need to be addressed to improve the drivers’ job. When drivers are expected to load or unload, we’re actually asking drivers to foot the bill for this part of the process. Freight allowances simply don’t compensate for the motor carrier to perform this service any longer.

–  More accountability is necessary by both shippers and receivers. When trucks are tight, you can bet the facilities that get them in and out fast are going to be their first choice. Drivers make no money sitting and they lose money if they pay for it at the same time.

–  The supply chain needs to move away from the “drivers fault” mentality.

 The driver shortage we are seeing has no relief in sight. For the first time ever, more loads are available in all 48 continental states than trucks. As the economy continues to recover, we are seeing broader space between available freight and capacity to cover it. Here are some major factors in creating and sustaining the current capacity crisis:

1. Age of drivers – The driver pool is being pinched from both ends. Baby boomer drivers are retiring. On the other side, we have lost young people who elected to go into the work force right out of high school. Years ago, they could drive trucks at age 18, but it has since been raised to 21. So by the time they reach 21, they can be well on their way to a different career.

2. Lifestyle – Truck driving is hard work and many young people have not had to work at a job this hard. It is up to our industry to improve the driver lifestyle and make it more appealing.

3. Salaries – Carriers are realizing the need for higher wages to attract good, safe drivers. They also need to bring big business benefits to the driving industry. These efforts will drive freight pricing upward.

4. Regulations – Regulations are assaulting our “deregulated” industry.

a. The changes in Hours of Service are reducing driver income. Less hours = less miles = less pay. The most recent changes have reduced productivity by 3%.

b. CSA – the use of SMS data to score carriers has reduced the pool of carriers and placed legal liability on those who hire carriers. The CSA data has been repeatedly proven unfounded and leans heavily in favor of larger carriers. That needs to change.

c. Electronic Logging Devices (ELDs) – This will become mandatory by the end of 2016 and will increase transit times and prices. Increased transit times also limit drivers’ pay potential, therefore exacerbating the driver shortage.

d. CARB – California is a nightmare. The California Air Resource Board regulations have forced many carriers to boycott the golden state altogether. With less carriers running in California, freight rates have increased up to 20%.

e. Cost to conform to government regulations – The estimated cost of equipment upgrades to meet the above regulatory changes is estimated in hundreds of millions of dollars.

f. The vast majority of freight is transported by small carriers who possess the expertise to transport perishables. Efforts must be taken to protect the small carriers who are the heart of the trucking industry.

5. Parking the Vans and Reefers – With the recent boom in building, flatbed freight has surged. As more flatbeds are needed, carriers have parked their vans and reefers and more are moving flatbeds instead. Capacity turns to where the money is.

This information is certainly overwhelming to everyone. You may be asking yourself, “What can I do to help?”  Our advice to you is to appreciate the drivers and carriers you deal with every day. Thank them for doing a good job. Remember, everything we touch has traveled on a truck. Also, call your elected officials and let them know how you feel. You don’t have to be an expert. Just “talk” about the challenges our industry experiences in your own words. You’d be amazed at the interest elected officials have when they hear directly from their constituents. Lastly, do not be concerned about communicating these concerns to others in your industry, including your customers.

Posted on November 27th, 2014 in Trucking Industry