Subscribe to our free, weekly email newsletter!


2014 State of Logistics: Truckload—capacity tight and drivers needed

By John D. Schulz, Contributing Editor
July 01, 2014

The $300 billion for-hire truckload (TL) sector is enjoying a fairly busy 2014, with most carriers reporting a balanced picture of tighter-than-average capacity against decent if not spectacular demand levels.

“Demand for truckload capacity continues to be firm with some pockets of the country stronger than others, in particular the Texas market,” said Joe Dagnese, president of Con-way Truckload.

The biggest challenge for Con-way Truckload and other leading TL carriers continues to be finding qualified drivers. Demographics, tighter drug and alcohol screening, the government’s Comprehensive Safety Analysis (CSA) crackdown, so-so pay, and the rigors of the job have combined to make the pool of available drivers smaller—and more expensive to find and retain.

“As an industry, we need to be more innovative in how we attract new drivers and develop the next generation,” said Dagnese.

The driver shortage, described by one top TL executive as “horrible” already, promises only to get worse as the economic recovery continues and demand improves. The top TL carriers are working closely with veterans organizations, driving schools, and other outplacement resources to encourage military to consider truck driving as a career of choice after their service.

If they’re willing to learn how to drive a civilian 53-foot tractor-trailer, those vets will find an ample supply of jobs paying around $50,000 to start, jumping up to $60,000 in the second or third year. That’s because there are now more heavy trucks on the road than ever. The U.S. heavy-duty truck fleet grew to a record 3.66 million—the largest size on record during the first quarter and a 3.2 percent increase from a year earlier, according to market research firm IHS Automotive.

First time registrations surged 9.2 percent to just over 48,000 in the first quarter of this year, marking the strongest quarterly rise since the first quarter of 2007.

Eric Starks, president of transportation forecasting for FTR Associates, said recently that the U.S. economy is showing mixed signals, and it’s difficult to make a long-term call with confidence. But his preliminary analysis shows that between now and 2017, the TL sector will need to add an incremental 1.5 million drivers to stay at the current level of 2.7 million long-haul TL drivers.

The TL sector is also coping with what U.S. Chamber of Commerce President and CEO Thomas Donohue calls a “tsunami” of new regulations. These include tweaks to hours of service, CSA, and requirements for electronic on-board recorders. The bottom line for all this is higher costs, with productivity losses in the 3 percent to 5 percent range for most TL fleets.

In turn, TL shippers can expect carriers to be seeking that 3 percent to 5 percent back through rate hikes. Starks is predicting some TL carriers will seek as high as 6 percent rate hikes—but that will depend on geography.

“The West, Southwest, and Southeast are all tight right now, while TL demand in the Northeast and Midwest has slackened a bit from the surge earlier this year,” said Starks.

Given the driver shortage situation, FTR is forecasting Class 8 deliveries to contract from 290,000 units this year to 260,000 next year. But keep in mind, most of that demand is replacement-only purchases, with few TL fleets actually adding brand new capacity.

About the Author

image
John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The standard tools of B2B integration--EDI, VANs, translation software--have been around for more than two decades. In IT years, that's many generations of technology you've potentially missed out on if your organization is still using the same B2B integration solution it started with.

According to the report, this option will be made available in 14 metropolitan locales in the United States and will not come with an extra fee for Amazon Prime members.

DHL said this investment is being made to meet customer needs for ongoing growth in international e-commerce and global trade and will also provide more gates to accommodate additional aircraft, warehouse space, and new equipment to provide more capacity for sorting shipments and for unloading and reloading planes.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement partners Canada and Mexico in March dropped 5.3 percent annually to $96.1 billion.

U.S. carloads were down 9.1 percent annually at 273,387, and intermodal volume was up 4.3 percent annually at 281,090 containers and trailers.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA