A watchful eye on capacity always needs to be open, say trucking industry stakeholders
October 09, 2013
When addressing how, if, why, or when motor carriers plan to increase capacity, it is pretty clear there are many things standing in the way of doing so, intentions aside.
These things include: the economy; driver hiring, availability, training and retention; demand; and the increasing amount of regulations the industry faces. There are other things, too, of course, so this can be viewed as a short list.
At the recent FTR Transportation Conference in Indianapolis, there were widespread views regarding market factors germane to capacity expansion.
Small-to-mid-size carriers, explained Annette Sandberg, CEO of TransSafe Consulting LLC and former Deputy Administrator and Administrator of the Federal Motor Carrier Safety Administration, explained that small-to-mid-sized carriers are feeling the impact of regulations like the Hours-of-Service regulation that kicked in last July and CSA, among others. And on the capacity side, Sandberg noted that this has led to carriers of this size having concerns over losing loads to larger carriers.
Even with slow economic growth, coupled with the federal government shutdown, capacity availability has been “tight but predictable due to the moderate recovery, but available pockets here and there make it more predictable in helping to find trucks,” said Jim Tucker, COO of Tucker Worldwide, a global freight brokerage services provider.
Tucker added that there concerns remain on the supply side for carriers and how to deal with ongoing lack of available drivers.
And the overall sentiment from both carriers and shippers at the conference was that some type of capacity crunch does appear to be inevitable.
John Vesco, executive vice president for Comtrak, a subsidiary of intermodal services provider, the Hub Group, explained that with a capacity crunch likely coming down the road, it is imperative to be prepared for it, especially as Owner-Operators exit the business, due largely to cost pressures.
“Drivers are a precious commodity that we want to hold on to, especially the good ones,” he said. “With HOS and CSA, it is clear things are going to tighten up, and you want to have the best drivers out there for service and reliability.”
Stifel Nicolaus analyst John Larkin observed that strong driver recruiting is the best way to keep driver capacity utilization at bay, with the largest and most sophisticated carriers doing the best job to recruit experienced drivers, as well as offer driver training programs.
Ways to increase capacity cited by Larkin include getting them home regularly, new trucks, and a competitive pay scale.
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