In the wake of new electronic logging device (ELD) mandates, resulting rate increases and, consequently, fewer players able to compete in an ever-shifting market, North American shippers have been hearing for months that a truck capacity shortage would hit. And it has, leaving the industry looking for answers.
Not Just ELD Mandates
The ELD mandates aren’t the only factors driving this shortage. Harsh winter weather adversely impacts the availability of trucks, and rising fuel prices mean more overhead costs for shipping companies. Moreover, while the strong economy is beneficial for business in some ways (more consumer demand means more goods shipped, after all), it creates a high demand for freight and a subsequent lack of supply.
The Driver Dilemma
The most important factor creating the current shortage of trucks is the perennial shortage of drivers. High demand for freight means a high demand for quality drivers to move those goods. However, despite a highly available labor pool, workers (especially young workers) are not drawn to trucking, and at upwards of 40 percent by some estimates, driver turnover is high.
It turns out that even with driver sign-on bonuses, increasing pay, and financial aid for driver training schools, the long hours and lifestyle of truck driving don’t make for the most attractive of job prospects, especially when compared with what are considered to be more suitable gig economy jobs, such as construction and manufacturing. The new ELD mandates only exacerbate this shortage by reducing the amount of time drivers who do choose a life on the road can spend behind the wheel.
What’s more, autonomous vehicles can only do so much to mitigate these circumstances considering that high cargo theft rates continue to be a problem, and a truck without a driver is made even more vulnerable to crime.
Adapting To Disruption
The shortage of drivers, although a recurring concern for freight companies, is becoming increasingly urgent and threatens to disrupt not just the shipping industry but the entire supply chain and economy at large. With an unemployment rate below 4 percent, it will be an uphill climb to lure employees away from better-paying and less strenuous jobs and into work behind the wheel. But carriers will need to adapt to tight capacity and increasing rates, and most of all, do whatever they can to add drivers.
For insurance coverage that protects against disruptions like these in the industry, contact Falvey Shippers.