Carrier Capacity: How Less Trucks & Drivers Affect Shipping Costs

Written by Paul Forand
     

freight-management

The shipping industry is facing plenty of challenges today, and many of those center around drivers and trucks.   Demand for freight is pushing carriers to the limit, and the carriers are having difficulty keeping up.

This isn't just driving up costs.   In an increasing number of cases, it's even causing carriers to drop smaller or non-exclusive clients entirely, so they can consolidate their own loads with only their most-profitable customers. 

Why is this such an issue today?  There are a number of factors. 

Five Major Factors Contributing To The Current Shipping Demand

1 - An Aging Workforce

According to industry studies, the average age of a truck driver in America is nearly fifty.  There are far more seasoned truck drivers than young ones, and that average age is continuing to rise.  The trucking industry is having little success convincing younger people to become drivers, which means there aren't enough new drivers to replace the ones who are retiring.

Part of this has to do with the relatively low pay.

2 - New Government Regulations 

A series of long-awaited regulations hit in 2013 which may have been good for road safety, but detrimental to the driver workforce.   Much stricter drug policies were put into place, along with new regulations restricting drive hours relative to resting hours.   Other regulations in the pipeline include a mandate to use electronic driving logs to prevent truckers from falsifying mileage, and speed governors to prevent excessive speeding.  

All of this has reduced the profitability of truck driving, and has ultimately encouraged many veteran drivers to retire early. 

3 -  The Lifestyle 

There was once a sort of romance associated with truck driving - the lure of the open road, the excitement of traveling to new places and meeting new people. But today, the idea of spending so much time on the road simply doesn’t appeal to many in the workforce. Most would prefer to be close to their homes and families.

Better pay would undoubtedly help attract drivers, but at the moment, trucking is seen as far too much an inconvenience relative to the current pay/benefits. 

4 - The West Coast Port Strikestransportation-strikes

Much of this came to a head last year with the work stoppage at the West Coast ports, which was literally the worst in recorded U.S. history. Container ships were forced to wait offshore, or diverted to other ports hundreds of miles away on the East Coast and Gulf Coast.  Repercussions have been felt by manufacturers and retailers who rely on the timely arrival of products they import. Exports have suffered because the ships waiting in port to be unloaded are the same ships that are supposed to take goods back to Asia.

Despite being officially resolved in February, another port strike could be looming in Southern California.

5 - High Turnover 

Drivers trying to keep their heads above water are changing companies frequently.   Yearly driver turnover is approaching 100% for many carriers, with few drivers staying more than about two years.   This seems to be about money, pure and simple.  Those who still want to drive are desperate to find a wage they can live on, especially those supporting a family at home.

So if it seems like it's harder to find affordable freight, you aren't imagining things.   The industry truly is facing significant hurdles.  

ReTrans Freight can help.  Give us a call today.