(Photo by Jim Park)
For several years now, trucking industry analysts have been predicting we were getting close to the edge of a cliff when it comes to the driver shortage – a point where drivers will become so scarce in relation to the freight to be hauled that some ends up sitting on the docks, and carrier rates go up.
One fleet exec, who asked to remain anonymous, tells me he thinks we're already there.
The safety director for a 160-truck regional fleet in the Midwest, with 28 years of military and civilian logistics experience, says he has "put freight on everything except the Space Shuttle and the Spruce Goose."
"The reason this is a secret is the carriers you talk to do not want anyone else to know they are using the driver shortage to raise rates or are picking up new business at higher rates," he says. "If you talk to shippers, you are going to find they are in fact paying higher rates and have been for the past six months.
"I get emails every day from larger carriers or 3PLs begging for trucks," he says. "They are offering round trip rates in the $3.00 to $5.00 per mile range. This has been going on since late last fall.
"Shippers don’t want to admit they are paying higher costs because they are afraid it will take the competition out of their bids. Carriers don’t want to admit they are getting higher rates because they want to steal drivers from the competition still getting lesser rates."
He says he's seeing unheard-of rates for drivers. A couple of examples:
- One large retail company was offering $600 per day plus fuel surcharge to run 250-350 miles per day with preloaded trailers in drop-and-hook operations.
- Another ad was offering a lane for $2,460 per load for team drivers and $2,300 per load for solo drivers. "This lane was getting moved at 110 cpm four months ago," he tells me. "30% rate increase in four months on a lane with very high capacity."
He recently attended a four-hour job fair with 15 other carriers and only one driver showed up. "It was sponsored by a driving school and a community college and their students did not even bother to show up."
He called a list of driving school graduates who completed CDL training locally in 2011. Of the 65 graduates contacted, only three are still driving truck.
His advertising cost per hired driver has gone from $75 to $1,100. "The drivers are just no longer here."