AUSTIN, Texas – Everyone knows the U.S. economy is humming, so the popular All Eyes on the Economy session at the American Trucking Associations (ATA) Management Conference & Exhibition was replaced this year with discussion of a topic that’s not so upbeat: infrastructure.
This year’s conference featured a roundtable discussion on: ‘The Cost of Doing Nothing: Why We Need Infrastructure Investment Now.’ Rebecca Brewster, president and chief operating officer of the American Transportation Research Institute (ATRI), first drew attention to the cost that congestion is inflicting on the trucking industry.
In 2016, lost productivity due to traffic congestion totaled 1.2 billion hours, equal to 425,000 trucks going nowhere for the entire year, she explained. This equates to US$74.5 billion in lost productivity. The states of Texas and Florida led the way, but it’s a nationwide “urban phenomenon,” Brewster said, with 90% of congestion costs coming in urban areas. The worst city in the U.S. to operate a truck based on congestion is Atlanta, Ga., where trucks average during rush hour 25 mph in an area with a 55 mph speed limit.
Unfortunately, the situation is bound to get worse as supply chains evolve, according to Bob Costello, chief economist with the ATA.
While total retail sales are flat, e-commerce sales are rising, and have increased 2,100% since 2000. In 2000, the share of e-commerce was less than 1% of all retail sales, but today it’s 9.6%. When excluding cars and gas – items that can’t be bought online – it’s roughly 16%.
“This is adding a lot of congestion in major metropolitan areas, because of this changing supply chain,” Costello explained. He noted the trucking industry’s average length of haul is decreasing, from just under 800 miles in 2000 for dry van truckload shipments, to an average of just 500 miles this year – a 33% reduction. For the first time since data has been tracked in the early ’90s, the average length of haul in some months this year has been less than 500 miles. Shorter hauls and more frequent shipments are adding to congestion in cities.
This is also having a negative effect on drivers, and the industry’s ability to recruit new blood.
“Nobody likes sitting in traffic,” Costello said, noting driver turnover at large truckload fleets reached an annualized rate of 98% in the second quarter.
For this reason, Costello said the driver shortage is not likely to improve in the short-term.
“If things don’t change – and I think they will because they have to – we could be 176,000 (drivers) short by 2026,” Costello said. “If we do that, not only is our industry in for a lot of hurt, the economy is in for a lot of hurt. Right now, it’s an operational hardship for fleets. If we ever get to that point, that’s when we will go to stores or go online, and they can’t get it to us or they don’t have the product.”
This year, the U.S. driver shortage is forecast to be about 63,000 drivers, Costello noted.
Another reflection of congestion’s toll on trucking, is the monthly decline in miles per truck. The number of loads is increasing, while trucks are putting on fewer miles, a reflection of shorter trips and longer wait times at loading/unloading facilities. This also makes it more difficult for fleets to project their operating costs. Brewster said ATRI examined a 40-mile route near Atlanta. Depending on the time of day, that route could take between 40 and 93 minutes. She said regulators should consider the benefit of more flexible hours-of-service rules, so drivers can better avoid peak traffic times.
“What if a driver could take a break outside Atlanta for four hours, then come through at a more advantageous time when they can drive through the city at a better speed because of less congestion?” she asked. Considering a split sleeper berth provision that would allow the driver to take four hours in the sleeper, Brewster said that driver would log 45.5 minutes less drive time.
Government must also assist by providing more safe truck parking, Brewster said. She mentioned an ATRI driver survey that found 36.5% of respondents parked in unauthorized areas three to four times a week, while only 10.8% said they never did.
“I think this reflects a much, much bigger problem for this industry,” she said.
Drivers spent, on average, 56 minutes per day seeking parking spots, which costs drivers US$4,600 per year.
“On average, those drivers are giving up about an hour a day of productivity just because they’re afraid they’re not going to find a place to park down the road,” Brewster pointed out.
Infrastructure also includes ports of entry, and Costello said international trade continues to grow.
“We need to have enough capacity and infrastructure at our borders,” he said. This year, there will be 12.3 million commercial truck border crossings at the northern and southern borders of the U.S., up from 9.3 million in 2009 – a 32% increase. In 2017, for the first time, there were more truck border crossings at the southern border than the northern one. The top three border crossings between the U.S. and Canada handle 57% of total crossings.
Commercial truck border crossings between the U.S and Canada require 20,234 U.S. jobs, of which 13,366 are truck drivers. Trade across the U.S. borders with Canada and Mexico accounted for US$2.81 billion in 2017, Costello noted.
The roads must also be maintained, and panelists advocated for fuel taxes as the fairest way to raise the funds needed.
Tonn Ostergard, CEO of Crete Carrier, said the average motorist loses $600 a year due to the higher maintenance and vehicle operating costs resulting from rough roads. The cost of congestion adds another $960 a year in annual costs to the everyday motorist.
“I can tell you, with our trucks it’s much more than that,” he said.
Road tolls are not endorsed by the U.S. trucking industry.
“Tolls are just a tax in disguise,” Ostergard said. “The fuel tax is the most efficient way to collect that.”
He added a fuel tax increase of 20 cents per gallon would cost every tractor-trailer about $2,100 per year.
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at email@example.com or follow him on Twitter at @JamesMenzies. All posts by James Menzies