Fleet Management

15 Things to Watch For in 2015 (And Beyond)

We’ve come up with 15 trends you should watch next year and beyond.

December 2014, TruckingInfo.com - Cover Story

by Deborah Lockridge and Oliver Patton

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The basic issues of trucking don’t really change – get the freight there on time, do it safely, stay on the right side of the law, keep fuel and other costs down. Yet we are living and working during a time where a lot is changing – technology, demographics, manufacturing, regulations and more. How will these changes affect your business? We’ve come up with 15 trends you should watch next year and beyond.

1. A worsening driver shortage

Driver turnover at large truckload fleets hit an annual rate of 103% in the second quarter of this year, according to the American Trucking Associations, the highest since the third quarter of 2012.

Expect it to get worse, as the economy continues to grow, existing drivers retire, and increasing regulations make it harder for drivers to meet government qualifications.

In fact, truckload turnover could reach over 150% in 2015, predicts Lana Batts, a longtime leader at ATA and the Truckload Carriers Association, now a partner in the merger/acquisition consulting group Transport Capital Partners and co-president of driver screening firm Driver iQ.

At many fleets, the standards for the quality of drivers they hire will be lowered, she says. It also will lead to more mergers as carriers “buy” access to more drivers. And watch for more driver pay increases and other incentives.

Many in the industry, however, are saying higher pay is not enough. Nor is regular home time. Anectodal evidence suggests that sectors that have always had low turnover thanks to higher pay and more home time, such as less-than-truckload and private fleets, are having more trouble finding drivers than ever before.

A longer-term solution will mean finding ways to bring a younger and more diverse workforce into the industry.

“I’m not sure we are taking seriously the void that will be left as they retire in increasing numbers over the next decade,” says Chris Kemmer of CK Commercial Vehicle Research. “Fleets know there is a shortage of techs and drivers and most want experienced people to fill those roles – however, we’re just stealing the limited resources from each other. We need MORE.”

Attracting that younger workforce, however, is a formidable challenge.

Many in trucking would like to see a path for drivers to get into trucking straight out of high school, currently not possible due to federal age minimums.

“The idea to allow younger drivers will gain speed, but the administration will not respond even though younger people have higher unemployment,” Batts predicts.

Even a regulation change wouldn’t address the fact that “truck driver” is not seen as an attractive career, no matter what the pay.

“Most Millennials are college graduates and would rather be a Starbucks barista or a teacher -- under no circumstances do they want to be a truck driver,” says John Larkin, managing director and head of transportation and capital markets research for the investment firm Stifel.

2. Tightening capacity

Acceleration of U.S. growth for several quarters would push freight growth up enough to push capacity utilization above 100% for six to nine months,” says Noel Perry, transportation economist and analyst for FTR.

The good news about tighter capacity is that it also helps lead to higher rates. Rate increases of between 8% and 10% are expected for the trucking industry no later than the second quarter, according to the annual State of Logistics report compiled by the Council for Supply Chain Management Professionals and Penske.

Kemmer foresees this leading to increased use of private fleets. “As shippers continue to hear about tight capacity and increasing rates, they could seriously consider growing their own fleet to control the capacity to haul their goods. Private fleets can oftentimes offer drivers a better work environment.”
In addition, watch for carriers to work more closely with shippers and receivers to reduce time wasted at the docks. Carriers are giving their capacity to these “preferred shippers” and either charging higher rates or turning down freight from those who don’t play nicely.

Shippers and carriers are also looking to intermodal to help ease capacity constraints, but the railroads have their own capacity problems – and the driver shortage causes problems getting the containers to and from the rail.

“Driver shortages in drayage markets are the worst in the industry,” says Perry.


3. Improving productivity

The driver shortage and regulatory burdens are hampering productivity.

Larkin notes that for long-haul operations, “we’ve seen a plateauing to 2,050 to 2,150 miles per week per truck,” while in the “old days, you would see 2,790 to 2,900 miles per week. But those days are behind us.”

Fewer miles mean more trucks for the same amount of freight – but it’s hard to put more trucks on the road when companies can’t find enough drivers.

That means fleets are doing all they can to improve the productivity of the trucks they have, from high-tech routing software and moving to drop-and-hook operations to lightweighting and double-decking systems for freight that’s otherwise not stackable.

Longer combinations and heavier trucks might help. Large trucking companies and shippers insist that the current federal limits are outdated and are preventing productivity increases that could go a long way toward relieving highway congestion.

On the other side are owner-operators, safety advocates and labor unions that say heavier trucks are an unacceptable safety risk. And the railroads oppose any capacity increase for trucks.

The 2012 highway bill ordered the Federal Highway Administration to do a comprehensive analysis to provide Congress the background for a decision. The analysis, originally due this fall but now delayed until early 2015, will look at the safety and economic implications of changing the federal limits.

4. Debating autonomous trucks

Daimler made headlines this year when it demonstrated its “Future Truck 2025” rig, showing the driver sitting back and perusing a tablet while the truck automatically maintained its lane and distance from other vehicles, even changing lanes, without a hand on the wheel.

Another project, which Paccar is involved in, is working on “platooning,” where technology allows a group of trucks to follow each other much more closely than would be safe with strictly manual human controls, saving fuel for all the trucks in the platoon.

Some believe such technology could help alleviate the driver shortage. But critics argue that autonomous vehicles could be vulnerable to being hacked by terrorists, and that there are ethical issues to deal with, not to mention questions of liability.

“So-called safety groups will stop the idea of ‘driverless’ trucks in its tracks,” Batts says. “Ironically, they don’t like drivers, but they dislike the idea of a ‘driverless’ truck even more.”

Comments

  1. 1. Craig Markowski [ December 13, 2014 @ 07:58PM ]

    It’s not a truck driver shortage but an enforceable compensation and safety issue.

    Since Federal, State or Local authorities do not enforce the laws when trucking companies cheat the drivers, paychecks usually fall far short of compensation earned .

    Complaints of extensive promised but unpaid diverted loads in the Texas oil country fall on deaf ears at the Department of Labor where they focus on “minimum wage issues” to companies who stretch the truth and mislead drivers about allowable axle spreads to leave the drivers personally liable for the thousands in overweight fines merely to be replaced with more of the trusting naive willing to take a chance to put food on their family’s table.

    And the local law enforcement who decline to prosecute the fully documented thousands in bad check’s paid to penalizing the drivers refusing to drive CDL risking overweight, poorly maintained death traps and fatigued conditions for endangering the unsuspecting public until the DOT finally shuts the shady companies down years later.

    It’s a question of trucking company integrity and accountability to attract and retain quality drivers.

  2. 2. Cliff Downing [ December 20, 2014 @ 06:37PM ]

    This will all lead down the path that increased immigration did. They are just doing jobs Americans won't do. There is truth to that. Very few Americans are going to work in the hot sun picking cherries for $8 an hour. Well, the same is true of trucking. You ask a person to leave his family for many days, and even weeks, at a time, have him live in a truck almost 24/7, he has to deal with truck stops, law enforcement, rotten traffic, terrible food, personal hygiene, laundry for cents per mile, or broke down with no compensation for waiting for truck to be repaired. Or even better, like Southern Refrigerated Transport's standard operating procedure, the driver dies in the truck and no effort is made to help the family even recover the body. Just throw the carcass out along the road, stuff another driver in the seat, and get back to hauling freight. And they wonder why there is a driver shortage? What a bunch of myopic fools.

  3. 3. sean o'rourke [ December 23, 2014 @ 08:19AM ]

    there is a shortage,the rates are going up in lanes

  4. 4. Herman [ December 25, 2014 @ 04:06AM ]

    DO THE MATH!!! If you're getting paid 0.35$ per mile and averaging 40mph/winter or 50mph/summer....etc.. At 70hrs per 8days you are earning less money than a janitor at a Federal building...and assuming much more risk...that's foolish and ignorant.
    Drivers don't need to strike.. The Darwin process is weeding out safe intelligent Drivers. While the greedy brokers get wealthy...

  5. 5. Harold Cain [ December 27, 2014 @ 09:19AM ]

    The basic foundations of any company that wants to prosper and inspire its employees is honesty and fairness. It does not take very long for an employee to discern (figure out) that he or she is being used or abused within their work environment. This leads to dissension and unrest and a battle of wits to who will win and prosper. What do you want to do for any company when you are being used this way!

  6. 6. Free2dsyde [ January 04, 2015 @ 06:51PM ]

    There's so much to say about this I don't know where to start .... been at this game for 29 yrs. Started driving mid 80's. I bought my first truck around 1992 and regretfully waited until 2005 to get my own authority. I've been waiting for the perfect storm for a while and seen it coming. I say there's too many "truckers" who don't have a clue about running a business ... starting with one simple word ... NO ... as in I don't haul cheap freight and in my book that means being able to keep fuel cost at a max 30% of the gross. I probably lost 1/3 of U already ... LOL. Currently I am pulling a dry van, but have had my own reefer, step deck, 7 axle heavy haul combo. Currently I haul same loads as a major carrier in a lane that consists of interstate hwy the entire way. The round trip is 600 miles but I only go loaded one way. Each load pays $1250 and I avg 6.1 mpg in a 1999 FLD120 ... U do the math. I sat for 3 days saying NO to cheap freight when I came across this haul in Dec 2014. Now they want me to add more trucks to cover more loads because they like the way I do business. I give this example not to brag but to show U it can be done and I been doing it this way for a long time, regardless of the type of trailer I was pulling. Have I made some sacrifices? U bet ... I don't get home every weekend. I don't live real fancy either but everything I own is paid for. And I don't live in a run down single wide mobile home in a trailer park either. Truckers have made their own pile of crap for years and allowed themselves to be treated like slaves and mostly just complained about it but never done anything to change it. Those of us who know what being independent truly means are jumping up and down because for us rates are going UP ... Way Up! God Bless U all ... try saying NO for once ... and stop listening to the cost cutting advisors who been telling U that super singles are the road to success.

  7. 7. BILL DOLLOFF [ January 06, 2015 @ 09:04AM ]

    we all seem to be concerned about the company harassing the driver but I sincerely think law enforcement is doing all it can to harass. example:
    windshield washer fluid low written up, no quallcom instructions in truck written up these are but a few we need help were not all p;erfect but are trying to do better everyday don't compound the driver problem. help; us

  8. 8. Johnson [ November 14, 2015 @ 10:24AM ]

    Trucker don't care about what you think or saying
    Trucker keep up the good jobs
    America stop with out trucker
    Love you trucker

  9. 9. Jason Furnell [ December 19, 2015 @ 08:29PM ]

    We use brokers and the board, times are slow and scary in the transportation industry. We got some good advice from Quickset Financial Group last month and feel optimistic about things picking up after the first quarter 2016. The companies that will survive will be using the advice of others that understand this economic trend. Good luck to everyone and look forward to a better year!

  10. 10. Mark [ February 11, 2016 @ 01:33PM ]

    There is no "driver shortage". There are only companies with too many trucks. If there was a driver shortage, the rates would rise while shippers compete for available trucks. Instead, rates just keep going down.

 

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