Shippers are facing a capacity crisis. The good news is, the solutions are right there in front of us.
This is a good news/bad news story. Let’s start with the bad.
Chances are good that you’re having a hard time keeping your customers satisfied this year. Business is brisk, but you’ve likely lost some drivers during the pandemic and finding replacements has never been more challenging.
Some chose to retire early to protect their health, while others chose a new career path to take advantage of a hot job market and to be home with their families more frequently. At the same time, new entrants have slowed to a trickle due to the temporary closures of training schools and licensing agencies.
As if that’s not bad enough, even if you do have the drivers, you can’t even get new trucks or trailers. If you have one on order, it could be sitting in a parking lot somewhere waiting for a semiconductor or other necessary component before you can take delivery. This would make it one of the 25,000 or so “red tag” units that are sitting incomplete due to a global supply chain crisis.
But your customers don’t care about that – they have their own supply chains to worry about and they want their loads delivered now! Industry indices have shown these are the most challenging times shippers have ever endured. The flip side of that is, they’re also among the most lucrative for truckers. Everyone is experiencing the same challenges, so the crisis has afforded truckers the opportunity to be more selective about the freight they haul and price it accordingly.
But that’s not the only good news. The other good news is the current situation provides the perfect opportunity to do more with less and fix some longstanding industry issues that for too long have been ignored, or patched up with short-term Band-Aid solutions. Solutions like adding more trucks, which doesn’t solve any issues related to productivity, or lack thereof, only makes the underlying issue more manageable for the time being and lets shippers off the hook for the inefficiencies they create for your business.
A recent webinar by industry forecaster FTR examined how trucking capacity and productivity can be improved in the pre-autonomous era. As it turns out, many of the solutions to improving productivity are right there in front of us, and they don’t even require adding more trucks and drivers.
Do you know how many hours a day your trucks spend actually moving? Greer Woodruff, senior v.p., J.B. Hunt, says the industry average is just 6.5 hours a day. Electronic logging devices (ELDs) give you the tool needed to crunch the numbers and see how your fleet compares. Improving that number to just 8.45 hours out of an 11-hour driving shift (in the U.S.) would add 30% capacity without the need for an additional truck or driver. Think of the impact extrapolated over the industry.
But how can that be achieved? It’s not rocket science. But it requires collaboration with shippers, something that is often lacking. Expedited loading and unloading. More drop-and-hook. More flexible appointment times for after-hours pickups and deliveries. On-site, overnight parking at shippers and receivers. Those are all simple ways to immediately improve driver productivity and they don’t cost a thing.
Research conducted by freight matching platform Convoy suggests that increasing drop-and-hook loads by 1% would equate to adding 10,000 drivers industry-wide, especially when fully exploited by private fleets that have traditionally been less concerned with finding backhauls.
“I happen to believe we have plenty of drivers. We don’t use them very well,” Woodruff said. And he’s absolutely right.
The best thing is, there is no loser in increasing collaboration with shippers to remove bottlenecks. The driver spends more time driving, thus seeing a bump in their income. Higher incomes will draw more drivers to the profession. Carriers improve their equipment utilization. And shippers get their goods shipped to market on time.
But it has to be done well. Woodruff cites the example of a well-intentioned shipper who agreed to pre-load trailers to reduce detention time. All well and good, until the driver crosses the scale and realizes they’ve been overloaded. Then it’s back to the end the line and the same ol’, same ol’.
This has been a challenging year, to be sure, but it’s also one of great opportunity. Virtually every consumer has been touched in some way by the global supply chain crisis. Mainstream newspapers that have traditionally relegated transportation and supply chain news to the back pages are putting such stories on the front page. Above the fold!
Society as a whole is beginning to understand the crucial role trucks play in the supply chain. Shippers have never been under more pressure from the increasingly demanding consumer. Chances are good, they will be more receptive than ever to suggestions that will allow the industry to do more with what it has. And there’s a lot of room for improvement there without adding trucks and drivers.
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This why all trucking companies need to charge for dock time by the hour and pay local drivers with 5000 hours experience at least $24 .00 CD per hour and O T R drivers $28.34. / hour plus overtime pay once they have 5000 hours experience for all fleets on payroll plus good medical care and a safe spit for sick and injured truck drivers . trucking companies can work with nonprofits to provide the care the ont gov is not provided to truck drivers. If all shippers and receivers worked together we could get another 10 to 15 percent more trips out of our current supply of drivers and tractors. We should also look at some shippers having a leased trailer pool between their own plants over the next 3 years and get the U S and to set min freight and wage rates and in return do away with cabatoge rules for drivers making over $24.00 U S per hour plus medical on payroll.
I have retired but check in from time to time.
$24.00 is 1980s reddi mix wage and $20.00 is the wage paid all over pre-deregulation that was 40 years ago.
$24 in 1980 is equivalent in purchasing power to about $79.68 today, an increase of $55.68 over 41 years. The dollar had an average inflation rate of 2.97% per year between 1980 and today, producing a cumulative price increase of 232.00%. The 1980 inflation rate was 13.50%.
“Society as a whole is beginning to understand the crucial role trucks play in the supply chain.”
That’s only because they can’t get what they want right now. As soon as the supply chain crisis is mitigated … probably sometime mid-2023 … “Society as a whole” will be back to trying to get trucks off the roads they drive on, and shippers will be working overtime to beat the rates into negative profit territory.
Same old, same old.
The blame lies in many areas and fixing them is almost impossible.
The first I seen this mess were in today was invented by the computer ,back in approximately 1960 we delivered wire threw out toronto on. doing as many as 12 to 16 drops a day and we had a 1 and 1/2 hr drive to get there (to Toronto ) We would back in ,unload the receiver would sigh and off to the next stop but then it go so receiver had to go computer to see who ordered it and where it went and with in that year we was down to 5 or 6 drops a day and being paid by the drop it wasn,t long till manufactures had to deliver them selves . I drove off and on threw out my life and found it was impossible to make a living the way receiving is done today .